Fair Value Flashcards by Unknown Unknown

Q

FV hierarchy examples

A

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Q

How is fair value determined for financial assets in an active market

A

Identicalquoted prices is lvl 1, most reliable

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Q

Which fair value measurement approach is used when discounting future cash flows to determine value

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Q

What defines a transaction involving market participants for fair value reporting

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Q

What is market approach

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Q

How is fair value determined when no principal market exists

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Q

Which valuation technique is NOT used for fair value measurements in impairment testing

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Q

What is the GAAP definition of fair value for an asset or liability

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Q

A

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Q

How do you determine fair value when no principal market exists

A

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Q

Which fair value disclosure is NOT required under ASU 2018-13

A) Transfers between Level 1 and Level 2.
B) Valuation technique (market, income, cost).
C) Disposition of changes in fair value.
D) Uncertainty in fair value measurements.

A

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Q

How is the fair value option applied for financial instruments under GAAP

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Q

What are the MOST important characteristics of fair value measurement under GAAP

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Q

How is the fair value of restricted shares determined under the fair value hierarchy

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Q

What adjustments are made to an asset’s price for fair value measurement under GAAP

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Q

What are the disclosure requirements for fair value measurements in periods after initial recognition

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Q

What defines a principal market for determining the fair value of an asset

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Q

How do you calculate fair value when no principal market exists

A

Q

How to evaluate statements about entry price and exit price differences in fair value problems

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Q

How is the fair value of a building determined when its carrying amount is impaired

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Q

What disclosures are required for fair value measurements in annual financial reports

A

Q

What is the key assumption for fair value measurement of nonfinancial assets under ASC Topic 820?

A

Q

What is the key assumption in fair value measurement

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Q

What is the market approach for determining fair value, and how does it differ from other valuation techniques

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Q

Are both observable inputs and entity assumptions valid for fair value measurements

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Q

When is the entry price least likely to represent fair value?

A

Distressed Sales: Entry price doesn’t represent fair value when the seller is under duress (e.g., raw materials from a bankrupt supplier).

Q

Which disclosure is not required for fair value measurements under ASU 820, and why

A