In which circumstance will it be necessary to determine the fair value of an entity's own equity instruments?
A)where the entity is preparing for listing
B)where the entity undertakes a business combination and issues its own equity instruments in exchange for a business
C)where the entity undertakes a share buy-back
D)where there is a change in the shareholding of the entity.

Question

Quizplus · Accepted Answer

Determining the fair value of an entity's own equity instruments is mainly required when the entity undertakes a business combination and issues its own equity instruments in exchange for a business. In this situation, it is necessary to determine the fair value of the equity instrument to enable accurate and transparent accounting for the business combination. While the other options may also require a fair value determination, they are not the primary circumstances in which it is necessary.

In Which Circumstance Will It Be Necessary to Determine the Fair