The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date is called:
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A. B. C. D.B
The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date is referred to as fair value.
Fair value is an accounting concept that is used to measure the value of an asset or liability on a balance sheet. It is based on the principles of market value, which assumes that buyers and sellers are both willing and able to engage in a transaction. Fair value takes into account all relevant market information, including the price of similar assets or liabilities, as well as the current economic conditions and the specific characteristics of the asset or liability being valued.
Fair value is different from other measures of value such as face value, which is the nominal value of an asset or liability, and transaction value, which is the actual price paid or received in a specific transaction. Fair value is also distinct from market value, which is the price at which an asset or liability would be traded in an open market under normal conditions.
The concept of fair value is important for financial reporting purposes, as it allows companies to provide more accurate and relevant information about their assets and liabilities to investors and other stakeholders. In addition, fair value is often used in the valuation of derivatives and other complex financial instruments.
In summary, the correct answer to the question is B. fair value.