Which of these is not true with respect to the assumptions of the value-in-use and the value-in-exchange approaches?
A)Additivity of economic phenomena is made in the same unit,adjusted for inflation and price movements
B)Up-to-date observations of market prices are more relevant for financial decision making
C)Valuation does not depend on a subjective allocation
D)Historical cost accounting is a fairly reliable valuation method

Question

Quizplus · Accepted Answer

The assumption that historical cost accounting is a fairly reliable valuation method is not true for either the value-in-use or value-in-exchange approaches. The historical cost accounting method does not account for changes in the value of assets or liabilities over time and is therefore not useful for determining the current or future value of an asset.

Which of These Is Not True with Respect to the Assumptions