In measuring an equity instrument at fair value the objective is to estimate an exit price at measurement date from the perspective of:
A) the issuer of the equity instrument;
B) the party to whom the instrument will be transferred;
C) the party who intends to repurchase the instrument;
D) a market participant who holds the instrument as an asset.

Question

Quizplus · Accepted Answer

The objective of measuring an equity instrument at fair value is to estimate an exit price from the perspective of a market participant who holds the instrument as an asset. This approach considers the price that would be received in an orderly transaction between market participants at the measurement date, which is consistent with the market-based approach used in fair value measurements.

In Measuring an Equity Instrument at Fair Value the Objective