Worldatwork Exam T7 Topic 3 Question 103 Discussion

Actual exam question for Worldatwork's T7 exam

Question #: 103
Topic #: 3

[All T7 Questions]

The International Accounting Standards Board (IASB) has given companies the option to use fair value as the basis for measurement of financial assets and liabilities. Which of the following best defines fair value?

AA residual interest in the assets of the entity after deducting all its liabilities

BFaithful representation of the amount paid for a given item

CAmount for which an asset could be exchanged or a liability settled between knowledgeable, willing parties in an arm's length transaction

DQuality of information that confirms users' earlier expectations

Show Suggested Answer

Suggested Answer: A

by Tony at Nov 12, 2024, 11:54 PM

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Wilda

1 months ago

Well, if it's not C, I'm going to have a fair bit of trouble with this exam. Glad I didn't choose the 'residual interest' option - that would have been a real liability!

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Vivan

1 months ago

C is the way to go. I mean, who wouldn't want their financial assets and liabilities measured by the amount for which they could be exchanged between knowledgeable, willing parties? It's the fair-est of them all!

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Izetta

1 months ago

Hmm, I was between B and C, but I'm going with C. It just seems to capture the essence of fair value better than the other options.

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Tora

1 days ago

User 2: I agree, that definition really captures the essence of fair value.

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Lonna

7 days ago

User 1: I think fair value is the amount for which an asset could be exchanged or a liability settled between knowledgeable, willing parties in an arm's length transaction.

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