Mistaken idea “The measurement alternative is a permanent cost method”

The measurement alternative does not freeze a qualifying private equity security at cost. The entity must consider impairment each reporting period. It also processes supported price evidence from an orderly same-issuer transaction involving comparable securities.

A diagnostic gives shares with $180,000 cost, a supported $25,000 upward observable adjustment, and a $10,000 impairment. A learner who reports $180,000 because the shares are private has missed both required updates. The corrected carrying amount is $195,000. The learner must also identify the election and the lack of a readily determinable fair value. Transaction evidence must establish the issuer, comparable rights, an orderly exchange, and impairment support.