After initially recording an asset at cost,fair value is
A)the price at which an asset could be sold in a current transaction between independent parties.
B)the actual,or historical,price at which the asset was acquired.
C)the easiest value used to measure and record assets.
D)verifiable at all future dates by referring to the invoice price paid for the asset.

Question

Quizplus · Accepted Answer

Fair value is the estimated price at which an asset could be sold in a current transaction between independent parties, and it may differ from the historical or actual cost of the asset. Fair value is not always verifiable by an invoice price, and it may require professional judgment and valuation techniques to determine. Choice B and D are incorrect because they refer to historical cost and invoice price, respectively, which are not always indicative of the current fair value of an asset. Moreover, Choice C is incorrect because fair value is not necessarily the easiest value to measure and record assets.

After Initially Recording an Asset at Cost,fair Value Is