GAAP requires that all derivative financial instruments be reported at their
A)historical cost
B)fair value
C)present value
D)par value

Question

Quizplus · Accepted Answer

GAAP requires that all derivative financial instruments be reported at their fair value, which is the amount for which the instrument could be exchanged in a current transaction between willing parties. This is to ensure that the financial statements provide users with relevant and reliable information about the entity's financial position and performance. Historical cost, present value, and par value are not appropriate for reporting derivative financial instruments under GAAP.

GAAP Requires That All Derivative Financial Instruments Be Reported at Their