When determining the fair value of an asset its fair value is based on its:
A) current use.
B) proposed use.
C) highest and best use.
D) value in use.

Question

When determining the fair value of an asset its fair value is based on its:
A) current use. 
B) proposed use.
C) highest and best use.
D) value in use.

Quizplus · Accepted Answer

The fair value of an asset should be based on its highest and best use, which is the use that maximizes its value. This means that the fair value is not necessarily based on its current use or proposed use, but rather what the asset is capable of achieving in terms of value. Value in use is also not the same as fair value, as it refers to the value of the asset to the owner based on its actual use.

When Determining the Fair Value of an Asset Its Fair