The book states that the following for Unquoted Equity instruments: “Unquoted equity instruments (in limited circumstances where the fair value is not reliably measurable, cost may serve as a proxy (estimate) for fair value)”
What does this “cost” means? I selected Amortized cost in the following question and it was wrong.
XYZ Corp. is a specialist trading firm that invests in thinly traded Japanese unquoted equity .The firm policy is to never hold more than 5% of the stock. According to US GAAP, the most likely balance sheet measurement base for the equity is:
a. cost. (right answer)
b. amortized cost.
c. fair value.