When deciding how to measure the fair value of an asset or liability, there is sometimes a trade-off between ________.
A) understandability and comparability
B) faithful representation and neutrality
C) verifiability and neutrality
D) relevance and faithful representation

Question

Quizplus · Accepted Answer

The trade-off is often between relevance and faithful representation, as ensuring information is relevant might sometimes compromise the faithful representation of that information, and vice versa.

When Deciding How to Measure the Fair Value of an Asset