Which of the following best represents a complex valuation issue in the acquisition of a new entity?
A)Carrying value of assets and liabilities.
B)Book value of assets and liabilities.
C)Fair market value of assets and liabilities.
D)Liquidation value of assets and liabilities.

Question

Quizplus · Accepted Answer

Fair market value takes into account various factors, such as the current economic environment, supply and demand, and future growth potential, which can make the valuation of an entity more complex than simply using the carrying or book value. Factors such as intangible assets, goodwill, and contingent liabilities may also need to be considered in determining the fair market value. The liquidation value is typically used to determine the minimum value of an entity in a forced sale scenario and may not accurately reflect the true value of the entity going concern basis.

Which of the Following Best Represents a Complex Valuation Issue