If the Fair Value of Equity Securities Is Not Determinable

question 152

Multiple Choice

If the fair value of equity securities is not determinable and the equity method is not appropriate, the securities should be reported at:

• A) Amortized cost.
• B) Cost.
• C) Consolidated value.
• D) Net present value.

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Definitions:

Liquidation

The process of winding up a company's financial affairs by selling its assets to pay off its debts.

Predictive Value

The ability of financial information to help users make accurate predictions about future outcomes.

Future Events

Incidents or occurrences that have not yet happened but are anticipated or expected to occur in the course of a business's operation.

Constraint In Accounting

In accounting, constraints involve the limitations or boundaries that must be considered when preparing financial statements, such as materiality, cost-benefit considerations, and timeliness.