Fair value (of an asset) is
A) an entry price.
B) an entity-specific measure.
C) an exit price.
D) not used when following IFRS.

Question

Quizplus · Accepted Answer

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It represents an exit price, which is the price that an entity would receive when selling an asset or paying when transferring a liability. Option A is incorrect as entry price is not the same as fair value. Option B is incorrect as fair value is a market-based measure that is not entity-specific. Option D is incorrect as fair value is a widely used measurement under IFRS.

Fair Value (Of an Asset) Is