Reference no: EM132789538

Problem 1: Which statement is true for measuring an asset at a fair value?

a. The price of the asset should be adjusted for transaction cost.

b. The fair value of the asset should be adjusted for cost of disposal.

c. The fair value is based upon an entry price to purchase the asset

d. The price should be adjusted for cost to transport the asset to principal market.

Problem 2: Which of the following would meet the qualifications as market participants?

a. A liquidation market in which sellers are compelled to sell

b. A subsidiary of the reporting unit interested in purchasing assets similar to those being valued.

c. An independent entity that is knowledgeable about the asset.

d. A broker or dealer that wishes to establish a new market.

Problem 3: Valuation techniques for fair value that include the Black-Scholes formula, a binomial model, or discounted cash flow are examples of which valuation technique?

a. Income approach

b. Market approach

c. Cost approach

d. Exit value approach