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Fair value

Fair value

In short paragraphs,Imagine that you are a consultant working on a special project to help a company determine techniques that it can use in order to calculate the fair value of investments. From the e-activity http://aaahq.org/ascLogin.cfm, prepare a report to management in which you compare and contrast at least three (3) methods to determine the fair value of investments. Also, recommend to management the method that the company should use in order to maximize the value of its investments. Provide a rationale for your response.

 

  • Suppose you have been hired by company XYZ to serve as a consultant who must explain the accounting treatment for notes receivables. Outline a memo that explains the advantages and disadvantages of preparing notes receivables using the fair value method versus using the historical cost method. Also, recommend to management the method that would provide the greatest benefit to the company. Support your response with specific examples of the benefits that would be derived from the method that you recommend.

 

 

 

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Fair value is defined as 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. Fair values are used in many situations in accounting, including the valuation of Investment securities, the valuation of Derivatives, the valuation of Assets purchased…

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