Page 19 - 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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