![]() The more uncertain the future liquidation value becomes (e.g., due to the date of disposition being uncertain or because liquidation of the investment portfolio will not occur in the near term), the more relevant the current fair value of the investment position may become for purposes of reporting under the liquidation basis of accounting. In some cases, a fair value measurement may be appropriate to approximate the amount of cash or other consideration that a reporting entity expects to collect, but ASC 205-30 does not presume that a fair value measurement would be applied to measure all assets. The definition of fair value under ASC 820 is “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.” This approach may not be appropriate for a reporting entity in liquidation because the process of liquidation can involve distressed or forced sales of assets without a sufficient period to market the assets or wait for an illiquid or depressed market to recover. While ASC 820, Fair Value Measurements and Disclosures, requires the use of market participant assumptions and the consideration of the most advantageous market when estimating fair value, the liquidation basis is developed from the reporting entity’s point of view and is based on the expectations of its management. Transfers and servicing of financial assetsįor a reporting entity in liquidation, the valuation premise used to prepare going concern financial statements may not always be appropriate. Revenue from contracts with customers (ASC 606) Loans and investments (post ASU 2016-13 and ASC 326) Investments in debt and equity securities (pre ASU 2016-13) Insurance contracts for insurance entities (pre ASU 2018-12) ![]() Insurance contracts for insurance entities (post ASU 2018-12) ![]() IFRS and US GAAP: Similarities and differences Business combinations and noncontrolling interestsĮquity method investments and joint ventures
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