In using fair value as a measurement for assets, a company ________.
A) would always use level 1 inputs
B) ideally would use level 1 inputs but if that is not possible would use the highest level of reliability possible
C) would calculate the present value of the expected future cash flows of the asset and use that as a measure regardless of what other inputs are available
D) would only value an asset with input levels 1 or 2 if the asset is impaired

Question

Quizplus · Accepted Answer

Fair value measurement prioritizes the use of observable inputs, with level 1 inputs being the most reliable. If level 1 inputs are not available, the company should use the highest level of reliability possible, such as level 2 or level 3 inputs.

In Using Fair Value as a Measurement for Assets, a Company