Under IFRS, Financial Statements Are Prepared on a Modified Cost

question 17

Essay

Under IFRS, financial statements are prepared on a modified cost basis, with an emphasis on fair value, which is more useful and relevant for users' decision-making purposes. Businesses may choose one of four recording methods that best reflects their economic activities and reality.
List the four approaches.

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Definitions:

Genuine Assent

An agreement to enter into a contract that is not clouded by factors such as fraud, duress, or mistake, indicating true and voluntary agreement.

Misrepresentation

A false statement of fact made by one party to another party, which has the effect of inducing that party into a contract.

Undue Influence

The situation in which one person has taken advantage of his or her dominant position in a relationship to persuade the other person unduly to the extent that the dominant person’s persuasive efforts have interfered with the other person’s ability to make his or her own decision.

Fraudulent Misrepresentation

An intentional false statement of a material fact made by one party to induce another party to enter into a contract.