Why is the application of fair value principle in measuring the financial position less objective than that of the cost principle? Illustrate with an example the necessary condition for fair value measurement to become more objective.

Q: Whether the firm uses the​ market-based approach or the​ cost-based approach for pricing​ decisions,…

A: Introduction: Market based approach: For calculating the selling price of Asset firm uses market…

Q: Maintenance costs at Oceanside Hotel over the past six months are listed in the following table…

A: Variable cost is the cost that changes with change in the activity of the cost driver used. The…

Q: Direct Materials, Direct Labor, and Reports budgeted and actual costs for variable and fixed factory…

A: a.

Q: Practitioners sometimes consider the financial distress costs in their APV applications. What are…

A: The current worth of financing advantages plus the net present value of a project or business's NPV…

Q: Financial information that is capable of making a difference in a decision is a) relevat b)…

A: Fundamental qualities of financial information should be: 1. Relevance 2. Faithful representative.

Q: What is the Joint Hypothesis and what are its implications for tests of asset pricing models?

A: The Capital Asset Pricing Model (CAPM) is a model that explains the relationship between expected…

Q: Describe the approaches for measurement of fair value.

A: When measuring fair value of fixed assets, intangible assets, specified financial assets or…

Q: why is there a need to use different financial tools and techniques?

A: Financial statement analysis- It is the process of reviewing and analyzing financial statements to…

Q: What is “fair value”? Consider whether it is really helpfulwhen reporting financial results. Give…

A: Fixed assets: These include all the assets that are of tangible nature and have an expected useful…

Q: a. The market value of the comps should be available.   b. The valuation object should be compared…

A: Share valuation is the process of determining the value of the shares based on certain factors.…

Q: AAP should require fair value measurement of either more o

A: A fair value measurement is used to determine the worth of a certain asset or liability. As a…

Q: What element should be assessed when considering the quality of profit and loss and balance sheet.

A: The elements are as follows: Leverage is a measurement of the business's ability to meet long-term…

Q: How does an “opportunity cost”,  subtracting from the revenue of an alternate course of action,…

A: Opportunity cost: Opportunity cost is a loss of income from one alternative if another alternative…

Q: Why must financial statements be relevant? Name and discuss the 3 items that make Financial…

A: The relevance of financial statements is crucial because they provide information that is useful to…

Q: Do you think that credit policy decisions are made more on thebasis of numerical analyses or on…

A: Providing credit will positively expand deals or sales income which would be useful for the business…

Q: What is the Fama-MacBeth Method in asset pricing assumptions?

A: Fama Mac Beth method is kind of regression method used for determining of parameters for like CAPM…

Q: e main hindrances in valuation estimates in busiiness valuation?

A: Introduction Knowing how much an asset is worth and what factors influence its value is critical for…

Q: How would you explain Valuation Principles and Law of One Price in simple language to someone…

A: Valuation principles and the law of one price are fundamental concepts in economics and finance that…

Q: What are the main criticisms of the Capital Asset Pricing Model (CAPM)? What does the empirical…

A: Capital Asset Pricing Model is a financial theory stating the linear relationship between required…

Q: State why payback analysis should be used only as a supplemental analysis tool when an economic…

A: Payback analysis is the method for calculating payback period of an investment. Payback period is…

Q: Explain the objective of Financial Reporting

A: Financial reporting is an accounting practice where the organization discloses the financial results…

Q: Describe the levels of fair value hierarchy?

A: Fair value:   A value which is determined based on the market situation, business demand, and the…

Q: Fair Value Accounting and Valuation in 3 Steps:   Asset or Liability Identification: The first…

A: Fair value is an amount that usually a person gets when he sells the asset or an amount paid to…

Q: Can CCC be negative? If so, what does it indicate?

A: “Hey, since there are multiple questions posted, we will answer first question. If you want any…

Q: Discuss the importance and differences of liquidity, solvency and profitability.

A: Liquidity is the ability to turn an asset into cash or cash equivalent with ease. Solvency is the…

Q: Who bears the costs of appraisal if the fair value ascertained by the appraisers is higher than what…

A: A stockholder can exercise his appraisal rights in case of merger or acquisition of the corporation…

Q: What are the quantitative disclosures that must be done by lessor?

A:

Q: Analyze the disadvantages of financial performance measures and the advantages of non

A: Disadvantages of financial performance measures  1 They indicates short term performance measures. 2…

Q: How are accounting judgments regarding internally generated intangible influenced by accountants’…

A: Step 1: Accounting judgement is the sharing of the judgements or sharing of knowledge and…

Q: standard setters?

A: Earnings management for contracting causes would be an interest in standard setters because of the…

Q: Explain Valuation and how can it be useful for determining

A: Valuation is to know how much is assets worth according to market or deciding fair value of assets.…

Q: Fair value is a more relevant measure to use in Financial Reporting than Historical Cost. Discuss

A: Introduction: Fair value accounting refers to the practice of valuing your company's liabilities and…

Q: Discuss the relationship between profit and ethics.

A: Ethics:   Ethics is the set of moral principles. It affects the behavior, mentality, etc. of a…

Q: How to incease profitability if PE Ratio, EPS Ratio, and ROE cannot be calculated because of its…

A: Accounting refers to the process of recording, summarizing, interpretation and communicating the…

Q: How do the FCFE, APV, and corporate valuation approaches differ from one another? How are they…

A: FCFE, APV and corporate valuation all are techniques of valuation on the basis of equity. This…

Q: How can fi nancial statement analysis be used to evaluate the credit quality of a potentialfi…

A: Whenever, an investor is considering an investment proposal, he need to analyze the various things…