Because of the Uncertainties Involved in Making Future Predictions,AASB 119

question 61

Multiple Choice

Because of the uncertainties involved in making future predictions,AASB 119 requires:

• A) that the long-service leave estimate be based on the level of salary paid to employees at the time the entitlement was earned.
• B) that there is no consideration given to future inflation rates or promotion prospects of employees.
• C) that the discount rate used be based on the rates offered by high quality corporate bonds.
• D) that market-adjusted expected cash flows be discounted at the risk-adjusted rate.

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Definitions:

Information Transfer

The process of moving data and knowledge from one entity or place to another, often through communication or technology.

Monitoring

The act of observing, checking, and keeping a continuous record of a process or quality over a period of time.

Principle

A fundamental truth or proposition that serves as the foundation for a system of belief or behavior or for a chain of reasoning.

Performance Evaluation

The process of assessing the performance of employees, systems, or organizations against predefined standards.