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A Dual Measurement and Financial Reporting System

Fair value measurement provides information about expected benefits from investments and ranks investment alternatives. Historical cost tracks amounts paid for resources and is useful for oversight of spending. A dual reporting system using both measurements should be considered, as fair value and historical cost each serve different and useful purposes for investors and management rather than competing with each other.

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raini95
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37 views2 pages

A Dual Measurement and Financial Reporting System

Fair value measurement provides information about expected benefits from investments and ranks investment alternatives. Historical cost tracks amounts paid for resources and is useful for oversight of spending. A dual reporting system using both measurements should be considered, as fair value and historical cost each serve different and useful purposes for investors and management rather than competing with each other.

Uploaded by

raini95
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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A Dual Measurement and Financial

Reporting System
Fair Value Historical Cost
• For ranking and sorting out • useful for stewardship and
competing investment control decision as it tracks
alternative. the amount paid for
• Reporting how much the resources.
invested to acquired an • Decision is depends on
asset. whether there is a favorable
• Provide investor with useful spread between revenue
information about expected and cost
benefit from a certain
investment.
Conclusion

•Fair value can help standard setter and regulators


structure their thinking about such issue.
• Historical cost and fair value should not be
considered as competitor.
•Both of the measurement serve different purpose.
•The adoption of a dual measurement and reporting
system should be considered and discussed at a
standard setting level.

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