Financial institutions dealing with investments and other financial instruments prefer which method of measurement for that class of assets?
A) historical cost
B) fair value
C) present value
D) net realisable value

Question

Quizplus · Accepted Answer

Financial institutions prefer fair value measurement for investments and financial instruments because it provides a current and more accurate representation of the value of the asset. It also allows for better comparability among similar assets in the market. Historical cost may not reflect the current market value and present value and net realisable value may not be applicable for all types of financial assets.

Financial Institutions Dealing with Investments and Other Financial Instruments Prefer