Which of the following statements about fair value is true?
A) Level 1 inputs should be used to determine fair value only when Level 2 and Level 3 inputs are not available.
B) Level 3 inputs are observable market prices for similar assets in active markets.
C) Fair value accounting is also known as "mark-to-market" accounting.
D) Fair value is a measure of market-based entry value.

Question

Quizplus · Accepted Answer

Fair value accounting, often referred to as "mark-to-market" accounting, involves recording the price or value of an asset, liability, or equity based on current market prices, rather than historical cost. This approach reflects the current market conditions in the financial statements.

Which of the Following Statements About Fair Value Is True