Last answered:

11 Nov 2024

Posted on:

10 Nov 2024

0

Why Fair value of Liabilities?

I understand that the fair value of assets is determined as if the company goes bankrupt it has to sell at market value but why do we have to assess liabilities in fair value?  anyway it is going to be paid at book value as the accounting will be done on prudence basis recognising all the liabilites the company has to incur...?
1 answers ( 0 marked as helpful)
Instructor
Posted on:

11 Nov 2024

0
Hi Charu,
The company will sell the assets at the market price -> this is why we have fair value.
Best,
Ned

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