Exam 5: Fair Value Measurement

Fair value under AASB 13 Fair Value Measurement is defined as "the amount for which an asset could be exchanged,or a liability settled,between knowledgeable,willing parties in an arm's length transaction."

Which of the following statements regarding measuring liabilities is incorrect?

A market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis is a/an:

Inputs to valuation techniques can only be used if they are observable.

Which of the following is not an example of a level 2 input?

One of the key concerns surrounding the increased use of fair value is the reliability of the data.

Fair value is determined at the exchange date.

The objectives of AASB 13 Fair Value Measurement include which of the following? I To require disclosures about fair value measurement. II To require the use of fair value when measuring all assets and liabilities. III To define fair value. IV To set out in a single standard a framework for measuring fair value.

In measuring an equity instrument at fair value,the objective is to estimate an exit price at measurement date from the perspective of:

Which of the following is an example of an orderly transaction for the purposes of determining fair value?

The two most common measures for assets and liabilities used in AASB accounting standards are:

AASB 13 Fair Value Measurement allows the use of which of the following as a practical expedient when measuring the fair value of financial instruments where there are both bid and ask prices?

When determining fair value,the exchange transaction considered is a hypothetical one.

The use of the stand-alone valuation premise is appropriate when the market participant to whom the asset is being transferred would use the asset in conjunction with other assets.

In relation to financial assets and financial liabilities,the price a dealer is willing to pay is referred to as the:

In the context of a liability,the fair value is the amount required to be paid to settle a liability.

AASB 13 Fair Value Measurement considers that the fair value of a liability is equal to the fair value of a properly defined corresponding asset.

Which of the following is not a valuation technique prescribed by AASB 13 Fair Value Measurement?

AASB 13 Fair Value Measurement does not prescribe any disclosures as these are contained in other accounting standards

AASB 13 Fair Value Measurement allows the offsetting of financial assets and liabilities where the assets and liabilities are managed as a group.