According to U.S.GAAP,which of the following provides the most reliable measure for fair value measurement?
A) Observable market data serving as inputs into estimates into present value-based measurements such as foreign exchange rates.
B) Quoted market prices of identical assets or liabilities in inactive markets
C) Observable quoted market prices in active markets for identical assets or liabilities
D) Unobservable inputs used by the reporting entity when modeling how the market would determine the fair value of the asset or liability in question

Question

Quizplus · Accepted Answer

Observable quoted market prices in active markets for identical assets or liabilities provide the most reliable measure for fair value measurement according to U.S. GAAP. This is because they reflect actual market transactions and represent the most objective and verifiable measure of fair value. Other options (A, B, D) involve more estimation or subjectivity in determining fair value.