BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Carrying amount of the asset distributed
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Fair value of the asset distributed
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Either the carrying amount or fair value of the asset distributed
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Neither the carrying amount or fair value of the asset distributed
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Detailed explanation-1: -An entity shall measure a liability to distribute non-cash assets as a dividend to its owners at the fair value of the assets to be distributed.
Detailed explanation-2: -a dividend payable should be recognised when the dividend is appropriately authorised and is no longer at the discretion of the entity. an entity should measure the dividend payable at the fair value of the net assets to be distributed.
Detailed explanation-3: -The fair value of a liability reflects the non performance risk based on the entity’s own credit standing plus any compensation for risk and profit margin that a market participant might require to undertake the activity.
Detailed explanation-4: -Fair value is a measure of an asset’s worth and market value is the price of an asset in the marketplace. Fair value accounting is the practice of measuring a business’s liabilities and assets at their current market value.
Detailed explanation-5: -Non-Cash Distribution means an entitlement accruing to a Security on Loan and consisting of a stock dividend, stock split, rights or other distribution other than the payment of cash.