Fair Value Framework

Question 0

Do you use transportation or transaction costs to determine the FV or an asset in the most advantageous market?

Answer 0

Transportation costs.

Question 1

In the determination of FV of a nonfinancial asset, how is the highest and best use of the asset determined?

Answer 1

Through use and through exchange.

Question 2

What is used in determining the FV of a nonfinancial asset & assessing the highest & best use of the asset?

Answer 2

What is physically possible
What is financially feasible
What is legally permissible

Question 3

The FV for an asset or liability is measured as

Answer 3

The price that would be RECEIVED when selling an ASSET

or

PAID when transferring a LIABILITY in an orderly transaction between market participants

Question 4

What are the purposes for the FV Framework set forth in ASC 820?

Answer 4

Provide a uniform definition of “fair value” for GAAP purposes.

Provide a framework for determining FV for GAAP purposes.

Establish expanded disclosures about FV when it is used.