By Permitting Some Classes of Assets to Be Valued at Cost

question 30

Multiple Choice

By permitting some classes of assets to be valued at cost and others at fair value the IASB has:

• A)removed any confusion regarding the total balance of non-current assets.
• B)forced entities to accurately reflect their true financial position at any point in time.
• C)created a situation where the total asset figure may be a combination of cost and fair value assessments, reducing its meaningfulness.
• D)removed the opportunity for managers to act in their own self-interest as suggested by Positive Accounting Theory.

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Definitions:

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The transfer of information from long-term memory into short-term memory.

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