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.

Question

Quizplus · Accepted Answer

Allowing some assets to be valued at cost and others at fair value creates a situation where the total asset figure may be a combination of different assessments, reducing its meaningfulness. This can lead to confusion and make it difficult to compare the financial position of different entities.

By Permitting Some Classes of Assets to Be Valued at Cost