Which of the following is not assumed when measuring the fair value of an equity instrument?
A)The market participant transferee will take on the rights and responsibilities associated with the instrument
B)An entity's own equity instruments are transferred to a market participant at transfer date
C)An entity's own equity instrument would remain outstanding
D)The instrument would not be cancelled or otherwise extinguished on the measurement date.

Question

Quizplus · Accepted Answer

When measuring the fair value of an equity instrument, it is not assumed that an entity's own equity instruments are transferred to a market participant at transfer date. Instead, it is assumed that a market participant transferee would be acquiring the equity instrument from the entity. Choices A, C, and D are all assumptions that would be made in measuring the fair value of an equity instrument.

Which of the Following Is Not Assumed When Measuring the Fair