When Changing from the Revaluation to the Cost Model of Measurement

question 27

Multiple Choice

When changing from the revaluation to the cost model of measurement for non-current assets, the model must be applied:

• A) in the current and future accounting periods.
• B) only to assets acquired after date of changing to the cost model.
• C) retrospectively.
• D) prospectively.

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Definitions:

Cash Balance Target

A cash balance target is a strategy companies use to maintain an optimal level of cash reserves for operations and unexpected expenses, aiming to balance liquidity with profitability.

Weekly Interest Rate

The interest rate applied to loans, savings, or investments calculated on a weekly basis.

Optimal Initial Cash Balance

Optimal initial cash balance is the ideal amount of cash a business should hold at the start of a period to meet operational needs and minimize costs, considering factors like transaction costs and opportunity costs.

Monthly Standard Deviation

A statistical measure that represents the variability or volatility of an asset's returns over a month.