If a company uses the fair value model to value investment property, changes in the fairvalue of the asset are least likely to aff ect:A. net income.B. net operating income.C. other comprehensive income.
If a company uses the fair value model to value investment property, changes in the fairvalue of the asset are least likely to aff ect:A. net income.B. net operating income.C. other comprehensive income.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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If a company uses the fair value model to value investment property, changes in the fair
value of the asset are least likely to aff ect:
A. net income.
B. net operating income.
C. other comprehensive income.
Expert Solution
Step 1
Under the fair value model, remeasuring of investment property is made at the end of each reporting period. Fair value is defined as a value where the exchange of property takes place between willing parties without deducting the transaction costs.
Other comprehensive income is an income which includes revenue or gains or losses that are yet to be realized. Example of this is the portfolio of bonds that has not yet matured.
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