When issuing common stock for noncash consideration, how does a company determine the value of the shares issued?

Question

Quizplus · Accepted Answer

When issuing common stock for noncash consideration, a company must determine the fair value of the shares issued. This is done by considering the fair value of the consideration received. Management judgment may also be used to determine the value of the shares issued, but this is not the sole factor that should be considered.

When Issuing Common Stock for Noncash Consideration, How Does a Company