The FASB and the IASB refer to the approach that uses the current market interest rate instead of the historical market interest rate to discount the remaining cash flows from financial instruments as the
A)future value option.
B)current value option.
C)liquidation value option.
D)fair value option.
E)accurate value option.

Question

Quizplus · Accepted Answer

The approach described in the question is commonly known as the fair value option, where financial instruments are valued based on their current market value instead of their historical cost or book value. This approach is advocated by both the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) as a way to provide users of financial statements with more relevant and comparable information about the fair value of assets and liabilities.

The FASB and the IASB Refer to the Approach That