For the same items in question A3, indicate which method (fair value or historical cost or depreciated historical cost) is more comparable across different companies.

Question A3

For each of the following accounts, explain whether you think that fair value would be more relevant than either historical cost or depreciated historical cost? Explain your answer.
A. Marketable securities the company is holding for sale in the near future.
B. Shares of stock in another company that the company is holding as a long-term investment. The intention is to hold this investment at least 10 more years.
C. Inventory of women’s dresses held for sale.
D. Inventory of copper, of a type that is sold on commodities exchanges.
E. Machinery used in a factory. The factory is expected to be useful for many years to come.
F. Machinery used in a factory. The industry is very unstable, and it is possible the factory may need to be closed in the next two years.
G. Advertising expenditures that have created favorable brand awareness in the public for the company’s main product.