Fair Value Framework

Question 1

ASC Topic 820, Fair value measurement assumption of nonfinancial assets:

Answer 1

The asset is in its highest and best use

Question 2

The accepted approaches in ASC topic 820 are:

Answer 2

cost approach
market approach
income approach

Question 3

FV option for valuing financial assets and liabilities must be applied to:

Answer 3

all interests in the same entity

Question 4

Principal market for establishing FV of Asset:

Answer 4

Market that has greatest volume and level of activity for asset

Question 5

Market participants in determining FV:

Answer 5

Buyers and sellers in principal market or most advantageous market for the asset or liability.
Should be independent, knowledgeable, able to transact for asset, and willing to transact

Question 6

Obligation for warranties valued at FV:

Answer 6

if warranties can be settled by contracting with a third party