Hello study fellows,
I am struggling on this subject: CMA Part 1, study unit 2, subunit 2.5. 'Measurement alternative for an investment in equity'.
Regarding the facts (Gleim CMA Review book):
(1) "The investment is measured at fair value at each balance sheet date."
(2) "The entity must reassess at each reporting period whether the fair value of an equity investment is readily determinable." If the qualitative assessment indicates potential impairment, the entity must estimate the fair value of the investment and perform a quantitative impairment test.
My question: at that point if the fair value of the investment can be estimated to calculate the impairment, why shouldn't this estimated fair value be used to measure the investment at fair value?
Thanks for your response and support.
Kind regards,
Leandra Tel------------------------------
Leandra Tel
[open to work]
Arnhem
Netherlands
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