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Chapter 7

Conceptual framework: measurement

Outcome

By the end of this session you should be able to:

 explain the use of:

– historical cost

– current cost

– net realisable value

– present value of future cash flows

 discuss the advantages and disadvantages of historical cost accounting

 discuss whether the use of current value accounting overcomes the problems of
historical cost accounting

 describe the concept of financial and physical capital maintenance and how this
affects the determination of profits

and answer questions relating to these areas.

The underpinning detail for this Chapter in your Integrated Workbook can
be found in Chapter 7 of your Study Text

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