Final answer:
Under ASPE, Related-party transactions are measured either by 'Arm's length' and transaction price. 'Arm's length' signifies the parties are acting independently while the transaction price is the agreed exchange amount.
Step-by-step explanation:
Under the Accounting Standards for Private Enterprises (ASPE), there are two ways to measure Related-party transactions (RPT): A) Fair value and historical cost B) Market value and replacement cost C) Arm's length and transaction price D) Book value and liquidation value. The correct answer is C) Arm's length and transaction price. Under these standards, transactions with related parties are typically measured at the exchange amount that is agreed upon by the transacting parties. The exchange amount is the amount agreed upon by the parties and implies that both parties entered into the transaction willingly. An arm's length transaction is one where the parties act independently without any special relationship influencing the transaction terms, which provides evidence of the transaction price.