Measuring the Value of Heritage Assets to Be Reported in the Statement

question 17

Multiple Choice

Measuring the value of heritage assets to be reported in the statement of financial position raises difficulties because:

• A) While reliable valuations may be made, the cost of maintaining and improving the value of the assets is so high that the capitalisation of these amounts often distorts the valuations.
• B) The cost of heritage assets is the most reliable measure, but because heritage assets may be very old their carrying value will often be zero under the requirements of AAS 29.
• C) Obtaining a reliable valuation for heritage assets is problematic because there will generally be no sales or purchases and no valid market comparison to use.
• D) The cost of obtaining detailed valuations by experts in the area of the specific type of heritage asset is prohibitive for most government departments.

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Definitions:

Telephone Bill

The monthly statement charging a customer for the usage of a telephone service.

Corporate Stock

signifies ownership shares in a corporation, offering holders a claim on part of the company's assets and earnings.

Construction Company

A business entity engaged in the building of structures, infrastructure, and other large-scale projects.

Intermediate Good

A product used to produce a final good or finished product.