Valuing assets at their fair value rather than at their cost is inconsistent with the
A)economic entity assumption.
B)historical cost principle.
C)periodicity assumption.
D)full disclosure principle.

Question

Quizplus · Accepted Answer

Fair value is a measure of the value of an asset or liability at a specific point in time, while cost is the amount paid to acquire an asset. The historical cost principle requires that assets be recorded at their cost and depreciated over their useful lives. Fair value accounting, on the other hand, requires that assets be recorded at their fair value at each reporting date. This is inconsistent with the historical cost principle.

Valuing Assets at Their Fair Value Rather Than at Their