What is "fair value"?
A)The present value of the future cash flows expected to be derived from an asset.
B)The amount obtainable from the sale of an asset in an arm's-length transaction less the costs of disposal.
C)The higher of an asset's fair value less costs to sell and its value in use.
D)The amount obtainable from the sale of an asset in an arm's-length transaction between knowledgeable, willing parties.

Question

Quizplus · Accepted Answer

"Fair value" is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This definition specifically mentions an arm's-length transaction between knowledgeable, willing parties, making option D the correct choice. Options A, B and C all provide different definitions for fair value, but none of them includes the specific requirement of an arm's-length transaction between knowledgeable, willing parties.

What Is "Fair Value