Fair Value Framework

Question 1

Fair Value

Answer 1

The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Question 2

What are the major purposes intended to be accomplished by the fair value framework?

Answer 2

1. Achieve increased consistency and comparability

2. Expand disclosure when fair value measurements are used.

Question 3

Market Participants

Answer 3

1. Independent of the reporting entity
2. Acting in their economic best interest
3. Knowledgeable of the assets or liability and the transaction involved
4. Able and willing, but not compelled, to transact for the asset or liabaility