The method for measuring and reporting different monetary amounts for various elements in the financial statements that uses the amount reasonably expected to be received for an asset, or settled in the case of a liability, between knowledgeable, willing parties to the transaction, which may be based on present value or market valuations is best described as current cost.

Question

Quizplus · Accepted Answer

The description provided refers to fair value measurement, not current cost. Fair value 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. Current cost, on the other hand, refers to the cost that would be incurred to replace an asset or settle a liability under current conditions.

The Method for Measuring and Reporting Different Monetary Amounts for Various