Page 37 - PowerPoint Presentation

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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