In measuring an equity instrument at fair value,the objective is to estimate an exit price at measurement date from the perspective of:
A)the issuer of the equity instrument.
B)the party to whom the instrument will be transferred.
C)a market participant who holds the instrument as an asset.
D)the party who intends to repurchase the instrument.

Question

Quizplus · Accepted Answer

The objective of measuring an equity instrument at fair value is to estimate an exit price at measurement date from the perspective of a market participant who holds the instrument as an asset. This means that the fair value should reflect the price at which a knowledgeable and willing market participant would sell the instrument in an arm's length transaction. The perspectives of the issuer or the parties involved in the transfer or repurchase of the instrument are not relevant to this objective.

In Measuring an Equity Instrument at Fair Value,the Objective Is