Asked by Juliana Gallego on Jun 04, 2024
Verified
When a firm does not adopt the fair value option,it
A) need not disclose the fair value of its long-term notes receivable.
B) still must disclose the fair value of its long-term notes receivable unless the reported value approximates fair value.
C) still must disclose the fair value of its long-term notes receivable if the reported value exceeds fair value.
D) may disclose the fair value of its long-term notes receivable if the reported value exceeds fair value,but such disclosure is not requireD.
Fair Value Option
An accounting strategy that allows companies to measure and report certain financial assets and liabilities at their fair values.
Long-term Notes Receivable
Loans or credit extended to others that are not expected to be repaid within the next twelve months, reported as long-term assets on the balance sheet.
Fair Value
The price that would be received for selling an asset or paid for transferring a liability in an orderly transaction between market participants at the measurement date.
- Acquire knowledge of the criteria for choosing and the consequences of implementing the fair value option pursuant to IFRS.
Verified Answer
AE
Austin EvanishJun 09, 2024
Final Answer :
B
Explanation :
Even if a firm does not adopt the fair value option, it still must disclose the fair value of its long-term notes receivable unless the reported value approximates fair value. This is because the disclosure of the fair value provides relevant information to the users of financial statements for decision making.
Learning Objectives
- Acquire knowledge of the criteria for choosing and the consequences of implementing the fair value option pursuant to IFRS.