Subsequent to the initial recognition of an asset an entity has a choice on the measurement basis to be adopted. The entity can choose either:

Question

Quizplus · Accepted Answer

The choice of measurement basis depends on the nature of the asset and its intended use. Cost is a simpler measurement basis and is often used for assets that have stable values over time, such as property, plant, and equipment. Revaluation is a more complex measurement basis and is often used for assets that have volatile or uncertain values, such as investment properties, biological assets, and intangible assets. Ultimately, the choice of measurement basis should reflect the most relevant and reliable information for financial reporting purposes.

Subsequent to the Initial Recognition of an Asset an Entity