AICPA Exam CPA-Financial Topic 2 Question 82 Discussion

Actual exam question for AICPA's CPA-Financial exam

Question #: 82
Topic #: 2

[All CPA-Financial Questions]

There are multiple active markets for a financial asset with different observable market prices:

There is no principal market for the financial asset. What is the fair value of the asset?

A$71

B$72

C$74

D$76

Show Suggested Answer

Suggested Answer: C

Choice 'C' is correct. This affects only the prospective (current and subsequent) periods - not prior periods, not retained earnings.

by Sharen at Mar 05, 2024, 01:58 PM

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Earnestine

2 days ago

Aha, the key here is 'fair value.' Gotta go with the most reasonable price, not the highest one. B) $72 seems like the way to go.

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Paola

3 days ago

Hmm, the question says there are multiple active markets, so I'm thinking the most representative price would be the average. That's C) $74.

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Whitley

7 days ago

If there's no principal market, I'd go with the highest observable price - that's D) $76. Gotta maximize that fair value, am I right?

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Ariel

9 days ago

I disagree, I think the fair value should be the average of all market prices, which would be $73.50.

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Evelynn

12 days ago

I agree with Kathrine, so the fair value would be $76.

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Kathrine

13 days ago

I think the fair value should be the highest market price.

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