Fair Value Measurement Flashcards
The price that would be received to sell and asset or paid to transfer a liability
fair value
Fair value synonym
exit price
Fair value is a __________ measure
market-based
Fair value is measured in the ______ market
principal
Fair value does not include ____________ costs
transaction
The fair value of a nonfinancial assets (PPE) assume s the _______ and _____ use of the asset
highest; best
In an orderly transaction, the transaction cannot be a __________ transaction
forced
The market with the greatest volume or level of activity
principal market
Market with the best price for the asset or liability, after considering transaction costs
most advantageous market
The most advantageous market is always the _____ option
second
3 valuation techniques for fair value:
market approach, income approach, cost approach
Quoted prices in active markets for identical assets or liabilities that the reporting entity has access to on the measurement date
level 1 inputs
Inputs other than quoted market prices that are directly or indirectly observable for the asset or liability
level 2 inputs
Level 2 inputs are for ______ assets or liabilities
similar
Reflect the reporting entity’s assumptions and should be based on the best available information for unobservable inputs for the asset or liability
level 3 inputs
Level 3 inputs used _________ cash flows
discounted
If multiple levels (1,2,3) are used, the FV is classified based up on the ______ _____ used
lowest level
