Which is an implication of not measuring fair value in a transaction?

Not measuring fair value in a transaction can lead to potential misrepresentation of financial statements. When fair value is not utilized, assets and liabilities may be recorded at historical costs or other measures that do not accurately reflect their current worth. This discrepancy can distort a company's financial position and performance, leading stakeholders to make decisions based on outdated or misleading information.

In financial reporting, transparency is essential for investors and other users to assess the true financial health of a company. By failing to measure fair value, a company might obscure the economic realities of its operations and financial condition, resulting in a lack of clarity for users of the financial statements. Therefore, the implication of not using fair value is that it can misrepresent the true valuation of assets and liabilities, ultimately affecting financial reporting's credibility and usability.