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 and disclose the measurement
D)record the maximum amount in the financial statements.

Question

Quizplus · Accepted Answer

When there is significant uncertainty with respect to the measurement of an item, the item needs to be recognized in the financial statements and disclosed in the notes to the financial statements. This will provide transparency to the users of the financial statements about the nature of the uncertainty and its potential impact on the financial position and performance of the entity. Option A, C and D are not appropriate as they don't provide complete and accurate information to the users of the financial statements.

Where There Is a Significant Uncertainty with Respect to the Measurement