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

Question

Quizplus · Accepted Answer

The other three assumptions are relevant to measuring fair value of an equity instrument, but an entity's own equity instruments transferring to a market participant is not an assumption. It is not typical for an entity to transfer its own equity instruments.

The Following Assumptions Are Made When Measuring the Fair Value