Financial Reporting Decisions

True or false: The selection of a measurement basis for an asset or liability should only consider the information it will produce in the statement of financial position.

True or false: The relative importance of each factor in selecting a measurement basis depends on the facts and circumstances.

True or false: The information provided by a measurement basis must be timely, verifiable, and understandable.

Amortised cost is likely to provide relevant information about cash flows that depend on factors other than principal and interest.

Using the same measurement basis for related assets and liabilities can create a measurement inconsistency.

A high level of measurement uncertainty prevents the use of a measurement basis that provides relevant information.

Measurement uncertainty is the same as outcome uncertainty and existence uncertainty.

True or false: The choice of measurement basis for an asset or liability is only determined by the initial measurement.

True or false: Historical cost always provides timely information about changes in value of an asset or liability.

True or false: Changes in fair value of an asset or liability always provide predictive value to users of financial statements.

True or false: Economic resources that produce cash flows indirectly are likely to be measured using historical cost or current cost.

True or false: The transaction price may be affected by relationships between the parties, or by financial distress or other duress of one of the parties.

True or false: An asset may be granted to the entity free of charge by a government or donated to the entity by another party.

True or false: A liability may be imposed by legislation or regulation.

True or false: The enhancing qualitative characteristic of timeliness has specific implications for measurement.

True or false: Consistently using the same measurement bases for the same items can make financial statements less comparable.

True or false: Verifiability is enhanced by using measurement bases that result in measures that can be independently corroborated.

True or false: Estimating consumption and identifying impairment losses or onerous liabilities can be subjective when using a historical cost measurement basis.

True or false: It may be difficult to verify the inputs and the validity of the process itself, resulting in reduced comparability.

True or false: Value in use can be determined meaningfully for an individual asset used in combination with other assets.

True or false: Using a current cost measurement basis can enhance comparability, both from period to period for a reporting entity and in a single period across entities.

True or false: The cost of an asset acquired, or of a liability incurred, as a result of a transaction on market terms is normally similar to its fair value at that date.