Under ASPE, when deciding whether to recognize a financial statement element (or not), and how to measure it, the accountant should
A) always use estimates.
B) record "hard" numbers and ignore "soft" numbers.
C) determine an acceptable level of uncertainty.
D) recognize a financial statement element even if it cannot be measured.

Question

Quizplus · Accepted Answer

When deciding whether to recognize a financial statement element and how to measure it, the accountant should determine an acceptable level of uncertainty. This means that they should consider the degree of estimation and uncertainty involved in the measurement of the financial element and decide if the information is reliable enough to be recognized in the financial statements. The accountant should also consider the materiality of the amount involved in the financial element and the impact it has on the financial statements. Therefore, option C is the best choice.

Under ASPE, When Deciding Whether to Recognize a Financial Statement