6/7/2017 WileyCPAexcelFAR

Disclosure Requirements Results 6/7/2017

Question 1
(AICPA.080123FAR-FVO)

For a firm that elects to use fair value to measure eligible financial assets and financial liabilities, specific disclosures are required for which of the following financial
statements?

Quarterly Financial Statements Annual Financial Statements

No No

No Yes

Yes No

Yes Yes

You Answered Incorrectly.

Firms which elect to measure financial assets and financial liabilities at fair value are required to make significant additional disclosures not only in annual financial
statements, but also in interim (quarterly, etc.) financial statements.

Question 2
(AICPA.080120FAR-FVO)

For a firm that elects to measure certain of its financial assets and financial liabilities at fair value, required financial statement disclosures are intended to facilitate which of
the following comparisons?

I. Comparisons between entities that use different measurement methods for similar assets and liabilities.
II. Comparisons between assets and liabilities of a single entity that uses different measurement methods for similar assets and liabilities.

Neither I nor II.

I only.

II only.

Both I and II.

You Answered Incorrectly.

While Statement I is correct, so also is Statement II. The intended purposes of financial statement disclosures required of a firm that elects to use fair value measurement
are to facilitate comparisons both across firms and for differently measured financial assets and liabilities of a single firm.

Question 3
(AICPA.080131FAR-FVF)

Which of the following statements, if any, concerning disclosures about fair value measurements in periods subsequent to initial recognition is/are correct?

I. The fair value hierarchy level within which fair value measurements fall must be disclosed.

II. Quantitative fair value measurement disclosures must be in tabular format.

Both I and II are correct.

I only.

II only.

Neither I nor II are correct.

You Answered Correctly!

Fair value measurement disclosures require both that fair value amounts be disclosed separately for each level of the fair value hierarchy and that quantitative
disclosures be provided in tabular format.

Question 4
(AICPA.090434FAR-SIM)

Under U.S. GAAP the disclosure requirements when fair value measurement is used are differentiated by which of the following classifications?

Between assets measured at fair value and liabilities measured at fair value

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6/7/2017 WileyCPAexcelFAR

Between fair value measurements that result in gains and fair value measurements that result in losses

Between items measured at fair value on a recurring basis and items measured at fair value on a nonrecurring basis

Between items for which fair value measurement is required and items for which fair value measurement is elected

You Answered Incorrectly.

Disclosure requirements when fair value measurement is used are not differentiated between fair value measurements that result in gains and fair value measurements
that result in losses. Generally, the same disclosures are required whether gains or losses occur.

Question 5
(AICPA.090394FAR-SIM)

When an entity uses the fair value option for eligible financial assets and liabilities, which one of the following is not an expected outcome of the disclosures required of that
entity?

Users being able to understand management's reasons for using the fair value option

Users being able to understand how changes in fair value affect net income

Replace the kind and amount of information that would have been provided if the fair value option had not been used with information related to fair value

Users being able to understand the difference between fair value and cash flows

You Answered Incorrectly.

The disclosures required when the fair value option is used are intended to enable users to understand how changes in fair value affect net income.

Question 6
(AICPA.090436FAR-SIM)

Which one of the following is not a required disclosure in annual financial reports for an entity that uses fair value measurement?

The level of the fair value hierarchy within which fair value measurements fall

The valuation techniques used to measure fair value

Combined disclosures about fair value measurements required by all pronouncements

A discussion of any change from the prior period in valuation techniques used to measure fair value

You Answered Incorrectly.

The level of the fair value hierarchy within which fair value measurements fall must be disclosed in annual financial reports for both items measured at fair value on a
recurring basis and items measured at fair value on a non-recurring basis.

Question 7
(AICPA.080121FAR-FVO)

For a firm that elects to use fair value to measure eligible financial assets and financial liabilities, specific disclosures are required for which of the following financial
statements?

Statement of Financial Position (Balance Sheet) Income Statement

Yes Yes

Yes No

No Yes

No No

You Answered Correctly!

Firms which elect to measure financial assets and financial liabilities at fair value are required to make significant additional disclosures for both the statement of
financial position (balance sheet) and for the income statement.

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