Worldatwork Exam T7 Topic 3 Question 103 Discussion

Actual exam question for Worldatwork's T7 exam

Question #: 103
Topic #: 3

[All T7 Questions]

The International Accounting Standards Board (IASB) has given companies the option to use fair value as the basis for measurement of financial assets and liabilities. Which of the following best defines fair value?

AA residual interest in the assets of the entity after deducting all its liabilities

BFaithful representation of the amount paid for a given item

CAmount for which an asset could be exchanged or a liability settled between knowledgeable, willing parties in an arm's length transaction

DQuality of information that confirms users' earlier expectations

Show Suggested Answer

Suggested Answer: A

by Tony at Nov 12, 2024, 11:54 PM

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Alline

7 days ago

Option C definitely sounds like the right choice to me. It's the only one that mentions willing parties and arm's length transactions.

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Crista

16 days ago

I think option C is the correct answer. It's the most comprehensive definition of fair value that I've come across.

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Francine

3 days ago

I agree, option C is the most accurate definition of fair value.

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Dan

22 days ago

I'm not sure about that. I think fair value is more about confirming users' expectations.

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Jaclyn

23 days ago

I agree with Evangelina. It's important for financial reporting to reflect the true value of assets and liabilities.

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Evangelina

24 days ago

I think fair value is the amount for which an asset could be exchanged between knowledgeable parties.

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