Many companies measure their non$-$current liabilities at amortized cost or carrying

value. However, some companies report at fair value. Which of the following

statements are true with respect to this matter.

$1.$ Only amortized cost or carrying value are acceptable under GAAP for

reporting long$-$term liabilities.

$2.$ Under the amortized cost or carrying value method of accounting for long$-$

term liabilities, the interest rate stays the same over the life of the liability.

$3.$ Increases and decreases in long$-$term liabilities under the fair value option

result in a debit or credit to an account on the income statement called

"Unrealized Holding Gain or Loss".

$4.$ If the Federal Reserve changes the Federal Funds Rate and this change

causes the interest rate within the overall economy to change, then the fair

value of a company's liabilities is also likely to change when reporting under

the fair value method.

$5.$ The FASB believes that the fair value method of measurement provides more

relevant information because it reflects the current cash equivalent value of

financial instruments.