At acquisition date,the cost price and fair value of an asset will be fairly equivalent.However,over the life of the asset,the:
A) fair value will always be greater than the cost price.
B) cost price will always be greater than the fair value.
C) fair value and cost price will most likely diverge.
D) fair value and cost price will remain fairly equivalent.

Question

Quizplus · Accepted Answer

Over the life of the asset, its fair value and cost price can diverge due to changes in market conditions, economic factors, and the asset's own depreciation or obsolescence. Therefore, the fair value and cost price may not always remain equivalent.

At Acquisition Date,the Cost Price and Fair Value of an Asset