One of the Arguments Against Recording Heritage Assets as Assets

question 22

Multiple Choice

One of the arguments against recording heritage assets as assets in the financial statements is that they typically generate negative net cash flows.SAC 4 argues in response to this that:

• A) Economic benefits as defined in SAC 4 extend beyond the mere financial benefits that an entity chooses to extract from its assets.
• B) These assets benefit the reporting entities, enabling them to meet their objectives of providing the needed services to beneficiaries.
• C) Meeting the needs of beneficiaries in a broad sense provides an economic benefit to society as a whole that should be captured through financial measurement in the annual reports of the entity.
• D) Heritage assets may in many cases not meet the definition of generating future economic benefits for the entity that controls them; however, in the cases where there is evidence of positive future cash flows these should be recorded as assets.

---

Definitions:

Patronizing Casinos

The act of visiting casinos to gamble, which can contribute to local economies but also raise concerns about promoting gambling addiction.

American Tourists

Individuals from the United States who travel to other countries for leisure, adventure, or cultural exploration.

Prohibition

A period in American history (1920-1933) characterized by the legal ban on the manufacture, transportation, and sale of alcohol.

Warren G Harding

The 29th President of the United States (1921-1923), whose term was marked by scandals such as the Teapot Dome scandal, although he also sought peace and prosperity post-World War I.