Final answer:
The cost of a plant asset acquired through the issuance of shares is measured by the fair value of those shares, providing a realistic value that aligns with the concept of capital gains.The correct answer is option D.
Step-by-step explanation:
When a plant asset is acquired by issuance of ordinary shares, the cost of the plant asset is properly measured by the fair value of the shares. This valuation method reflects the current market value and is more relevant to both the company and investors when compared to other measures like par value, stated value, or book value.
The concept of fair value is important because it provides a realistic and updated assessment of what the asset is worth if it were to be traded. It aligns with the idea of a capital gain, which represents the increase in the value of an asset between when it is bought and when it is sold, as illustrated by an investor buying a share of stock at one price and selling it at a higher price.The correct answer is option D.