Question
In preparing its December 31 year-end financial statements, Diego Enterprises is measuring the fair value of its 100 share investment in Javier Inc., originally purchased
In preparing its December 31 year-end financial statements, Diego Enterprises is measuring the fair value of its 100 share investment in Javier Inc., originally purchased at $105 per share at January 1 of this year. Shares of Javier Inc. are actively traded on two stock exchanges. The quoted stock price and transactions cost per share are $112 and $4 for Exchange One and $115 and $8 for Exchange Two, respectively, on December 31.
a. Determine the fair value measurement of the investment in Javier Inc. if Exchange One is determined to be the principal market.
b. Determine the fair value measurement of the investment in Javier Inc. if Exchange Two is determined to be the principal market.
c. Determine the fair value measurement of the investment in Javier Inc. if there is determined to be no principal market.
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Accounting Business Reporting For Decision Making
Authors: Jacqueline Birt, Keryn Chalmers, Suzanne Maloney, Albie Brooks, Judy Oliver
6th Edition
978-0730363415, 0730363414
