If a company chooses the fair value option for an asset or liability, all changes in the fair value of the asset (or liability), including unrealized gain and losses, will be included in net income.

Question

Quizplus · Accepted Answer

When an asset or liability is measured using the fair value option, any changes in its fair value will be included in net income. This includes both realized and unrealized gains and losses. Therefore, the statement is true.

If a Company Chooses the Fair Value Option for an Asset