Where a liability is held as a corresponding asset by another entity, the fair value of the liability is determined from the perspective of a market participant that:
A) applies a present value technique to measure the liability.
B) applies the cost approach to valuing the liability.
C) calculates the amount required to settle the present obligation.
D) holds the identical item as an asset at measurement date.

Question

Quizplus · Accepted Answer

The fair value of a liability is determined from the perspective of a market participant that holds the identical item as an asset at the measurement date, ensuring consistency in valuation between the asset and liability.

Where a Liability Is Held as a Corresponding Asset by Another