Fair Value

Question 1

FV hierarchy examples

Answer 1

Question 2

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

Answer 2

Identicalquoted prices is lvl 1, most reliable

Question 3

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

Answer 3

Question 4

What defines a transaction involving market participants for fair value reporting

Answer 4

Question 5

What is market approach

Answer 5

Question 6

How is fair value determined when no principal market exists

Answer 6

Question 7

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

Answer 7

Question 8

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

Answer 8

Question 9

Answer 9

Question 10

How do you determine fair value when no principal market exists

Answer 10

Question 11

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.

Answer 11

Question 12

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

Answer 12

Question 13

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

Answer 13

Question 14

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

Answer 14

Question 15

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

Answer 15

Question 16

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

Answer 16

Question 17

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

Answer 17

Question 18

How do you calculate fair value when no principal market exists

Answer 18

Question 19

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

Answer 19

Question 20

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

Answer 20

Question 21

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

Answer 21

Question 22

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

Answer 22

Question 23

What is the key assumption in fair value measurement

Answer 23

Question 24

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

Answer 24

Question 25

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

Answer 25

Question 26

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

Answer 26

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

Question 27

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

Answer 27