Which statement is correct about using the "fair value less point of sale costs" approach for biological assets?
A)The exception to "cost less depreciation" can be made at any subsequent measurement date.
B)Fair value may not be available for initial recognition, but could be used for subsequent measurement.
C)Fair value may be available for initial recognition, but then not be used for subsequent measurement.
D)Under this accounting method, fair value can only be higher than cost.

Question

Quizplus · Accepted Answer

The fair value less point of sale costs approach can be used for subsequent measurements, even if cost less depreciation was used for initial recognition. Fair value may not be available for initial recognition, but could be used for subsequent measurement. It is also possible for fair value to be used for initial recognition, but then not be appropriate for subsequent measurement. The statement in choice D is incorrect, as fair value can be both higher or lower than cost under this accounting method.

Which Statement Is Correct About Using the "Fair Value Less