_____ is the basis for the practice of reporting certain assets at the lower of acquisition cost or fair value.The requirement to test assets for impairment and to record impairment charges rests on the notion that balance sheet carrying values of assets should not exceed the amount of cash that the firm expects to receive by using or selling the asset.
A)Conservatism
B)Reliability
C)Relevance
D)Recognition
E)Realization

Question

Quizplus · Accepted Answer

Conservatism is the principle on which the practice of reporting certain assets at the lower of acquisition cost or fair value is based. This principle ensures that the balance sheet carrying values of assets do not overstate the amount of cash that a firm expects to receive by using or selling the asset. In other words, it requires a conservative approach to valuing assets.

_____ Is the Basis for the Practice of Reporting Certain