Fair Value Measurement Flashcards
1
Q
Fair Value Measurement Basics
A
Fair value includes transportation costs, but not transaction costs.
The price in the principal market for an asset or liability will be the fair value measurement.
2
Q
Valuation techniques that can be used to measure the fair value of an asset or liability
A
The income approach.
The cost approach.
The market approach
3
Q
Level 1 inputs
A
Identical
4
Q
Level 2 inputs
A
Similar
5
Q
Level 3 inputs
A
Discounted cash flows
6
Q
Fair value for an asset or liability is measured as:
A
Price that would be received when selling an asset or paid when transferring a liability in an orderly transaction between market participants.
