Real Value Corporation (the Company) is a public company (and an SEC registrant) that creates augmented reality technology. The Companys primary source of revenue is currently from universities that use the Companys products to superimpose computer- generated images in the classroom to enhance learning. In addition to its ordinary business activities, the Company invests in equity securities (described below) to generate investment income, which is the case for all investments made by the Company as described herein. The Companys fiscal year-end is December 31. The Company files quarterly and annual financial statements with the SEC.

The Company purchases equity securities in the form of Series A preferred stock of Company X (a private company) on February 1, 2020. The Company concludes that the equity security does not have a readily determinable fair value and that it does not qualify for the practical expedient to estimate fair value in accordance with ASC 820-10-35-59. In its Q1 2020 financial statements, the Company accounts for this investment in accordance with ASC 321 and elects the measurement alternative in ASC 321-10-35-2 on the date of purchase, as it does for all its investments described herein.

The terms for the Company X Series A preferred stock are as follows:

Has substantive liquidation preference over any other class of shares Company X has outstanding (these Series A shares would retain its substantive liquidation preference over any class of shares Company X may issue at any point in the future).

Has no voting rights.

Can elect two members of the board of directors.

Receives dividends that are cumulative and participatory.

Can be converted to common stock at any time at the holders option.

Required:

1. For purposes of the Q1 2020 financial statements, what criteria must the investment in Series A preferred stock of Company X meet to be eligible for the measurement alternative in ASC 321-10-35-2?

2. Given its election of the measurement alternative in ASC 321-10-35-2, how is the Company required to measure the equity security as of March 31, 2020?