The fair value of an entity's own equity instruments will be determined under which of the following circumstances?
A) Where the entity participates in a share buy-back.
B) Where the entity is preparing for listing.
C) Where the entity undertakes a business combination and issues its own equity instruments in exchange for a business.
D) Where there is a major change in the shareholding of the entity.

Question

Quizplus · Accepted Answer

When an entity undertakes a business combination and issues its own equity instruments in exchange for a business, the fair value of those equity instruments needs to be determined to account for the transaction properly.

The Fair Value of an Entity's Own Equity Instruments Will