Page 21 - Finac1 Test 1 slides - 2. The Conceptual Framwork
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THE CONCEPTUAL FRAMEWORK
Measurement
• Measurement basis:
• Historical cost items are recorded at the amount of consideration given at the
time of acquisition.
• Current cost items are carried at the value to be paid to acquire the equivalent
item currently.
• Realisable value items are carried at the amount that could be obtained from an
orderly disposal.
• Present value items are carried at the discounted present value of future cash
flows relating to the item.
• Going concern
• Financial statements are normally prepared on the assumption that an
entity is a going concern and will continue in operation for the foreseeable
future.
• If not, the financial statements must be prepared on a different basis and,
if so, the basis used is disclosed.
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