The Fair Value of an Asset, as Defined in the Accounting

question 54

Multiple Choice

The fair value of an asset, as defined in the accounting standards, is:

• A) the costs incurred to purchase an asset and make it ready for use.
• B) the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date, after deducting all the costs of that transfer.
• C) the price paid for an asset less any directly attributable costs.
• D) the costs that would be incurred if the asset needed to be replaced.

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Definitions:

FASB

The Financial Accounting Standards Board, an organization responsible for establishing and improving financial accounting standards in the United States.

Financial Accounting Standards Board

An independent organization responsible for establishing and improving standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors, and users of financial information.

SEC

The Securities and Exchange Commission, a U.S. government agency that oversees and regulates the securities markets to protect investors.

Accounting Standards

Guidelines set by regulatory bodies that dictate how financial transactions and statements should be recorded and reported.