A market quote or an appraisal is used to determine what of property held for sale?

Question

Options

• Acash equivalents
• Bannual fair value
• Cproperty value
• Dcurrent fair value

• B
  4% (1)
• C
  11% (3)
• D
  86% (24)

Explanation

D is correct because market quotes and appraisals are standard methods used to establish the current fair value of property held for sale - they reflect what a willing buyer would pay a willing seller at this moment, which is the definition of current fair value under accounting standards (e.g., ASC 820).

Why the distractors fail:

• A (cash equivalents) - a classification of liquid assets, not a valuation method or output
• B (annual fair value) - "annual" implies a periodic, fixed measurement; fair value is point-in-time, not annual
• C (property value) - too vague and not a defined accounting term; it lacks the "current" precision required

Memory tip: Think of the word current as the key. A market quote or appraisal gives you today's snapshot - that's current fair value. If you see "market quote" or "appraisal" in a question, pair it with "current fair value."

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