Under ASPE, where there is a significant uncertainty with respect to the measurement of an item,
A) do not record anything in the financial statements.
B) recognize the item in the financial statements and disclose the measurement uncertainty in the notes to the financial statements.
C) do not record anything in the financial statements but disclose the measurement uncertainty in the notes to the financial statements.
D) record the maximum amount in the financial statements.

Question

Quizplus · Accepted Answer

Under ASPE, if there is a significant uncertainty with respect to the measurement of an item, the item should be recognized in the financial statements (either as an asset, liability, or equity), and the measurement uncertainty should be disclosed in the notes to the financial statements. This approach provides users of the financial statements with relevant information about the nature and extent of the uncertainty, and allows them to make informed decisions based on the available information. Options A and C are not appropriate because not recording anything in the financial statements would not provide users with relevant information. Option D is not appropriate because recording the maximum amount would not be a faithful representation of the uncertainty surrounding the item's measurement.

Under ASPE, Where There Is a Significant Uncertainty with Respect