If a firm issues common stock in return for services other than from employees, the firm records the transaction at the fair value of the services received if it can more reliably measure this amount.Otherwise, the firm records the transaction at the fair value of the shares issued.

Question

Quizplus · Accepted Answer

The statement is true. According to accounting standards, when a firm issues common stock in return for services other than from employees, the transaction is recorded at the fair value of the services received if it can be reliably measured. If the fair value of the services cannot be reliably measured, the transaction is recorded at the fair value of the shares issued.

If a Firm Issues Common Stock in Return for Services