(ii) why the ‘fair value option’ was initially introduced and why it has caused such conce

(ii) why the ‘fair value option’ was initially introduced and why it has caused such concern. (5 marks)

(ii) Fair value optionAs set out above, the standard permits entities to designate irrevocably on initial recognition any financial asset or liabilityas one to be measured at fair value with gains and losses recognised in profit or loss. The fair value op