15 Questions
Which one of the following is a measurement basis identified in financial statements?
Book value
What does historical cost measure in financial statements?
Price of the transaction
Why might different measurement bases be selected for different assets, liabilities, income, and expenses?
To consider qualitative characteristics
Which measurement basis reflects estimates of future cash flows, discounted at a rate determined at initial recognition?
Amortised cost
What is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date?
Fair value
Which measurement basis provides monetary information about assets, liabilities and related income and expenses, using information updated to reflect conditions at the measurement date?
Current value
What is the value of the costs incurred in acquiring or creating an asset, comprising the consideration paid to acquire or create the asset plus transaction costs?
Historical cost
Which one of the following factors is NOT considered when determining fair value?
Transaction costs incurred when acquiring the asset or incurring the liability
Which one of the following is NOT a characteristic of value in use and fulfilment value?
They include transaction costs incurred on acquiring an asset or taking on a liability
Which one of the following measurement bases reflects prices in the market in which the entity would acquire the asset or incur the liability?
Current cost
Which one of the following is NOT a characteristic of current cost?
It is an exit value
Which of the following factors can affect the estimated amount or timing of future cash flows for an asset or liability?
Credit risk
What is the difference between current cost and historical cost?
Current cost reflects conditions at the measurement date, while historical cost reflects past prices
Which value reflects the present value of the cash flows an entity expects to derive from the use of an asset and its ultimate disposal?
Value in use
What is the main difference between fair value and value in use?
Fair value reflects market assumptions, while value in use reflects entity-specific assumptions
Test your knowledge of financial statement measurement bases in this quiz. Learn about the different measurement bases used in quantifying elements in financial statements, such as historical cost, fair value, and fulfilment value. Explore how these measurement bases impact the valuation of assets, liabilities, income, and expenses.
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