If noncash consideration such as stock of a publicly-traded company is given in a revenue contract,then the value to be used for the transaction price should be ________.
A)fair market value
B)book value
C)historical cost
D)net present value

Question

Quizplus · Accepted Answer

The fair market value should be used to determine the transaction price for noncash consideration such as stock of a publicly-traded company. This is because the fair market value represents the current market price of the stock and reflects its true economic value. Using book value, historical cost, or net present value may not accurately reflect the value of the stock at the time of the transaction.

If Noncash Consideration Such as Stock of a Publicly-Traded Company