Page 25 - FINAL CFA SLIDES DECEMBER 2018 DAY 7
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Session Unit 6:
23. Financial Reporting Standards
LOS 23.d: Describe the International Accounting Standards Board’s conceptual framework,
including the objective and qualitative characteristics of financial statements, required
reporting elements, and constraints and assumptions in preparing financial statements, p.27
Required Reporting Elements, p.29
• A, L, E, I, E
Measurement base:
• historical cost (the amount originally paid for the asset),
• amortized cost (historical cost adjusted for depreciation, amortization, depletion, and
impairment),
• current cost (the amount the firm would have to pay today for the same asset),
• net realizable value (the estimated selling price of the asset in the normal course of
business minus the selling costs),
• present value (the discounted value of the asset’s expected future cash flows), and
• fair value (the price at which an asset could be sold, or a liability transferred, in an
orderly transaction between willing parties.
