Page 89 - FR Integrated Workbook 2018-19
P. 89
Conceptual Framework: measurement
1.3 Disadvantages of financial statements produced using historical cost
Expenses do
not reflect
current value of
assets
consumed
Assets
understated
Profits
Disadvantages
overstated
Calculation of
return on
assets is
meaningless Full profit
distribution
would inhibit
future operating
ability
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