The Framework states that an asset should be recognised when and only when: (i)the asset possesses a cost or other value that can be measured reliably
(ii)it is legally owned by the entity
(iii)it is probable that the future economic benefits embodied in the asset will eventuate.
A) (i)and (ii)only
B) (i)and (iii)only
C) (ii)and (iii)only
D) (i),(ii)and (iii).

Question

Quizplus · Accepted Answer

According to the Framework, an asset should be recognised when it possesses a cost or other value that can be measured reliably and when it is probable that the future economic benefits embodied in the asset will eventuate. Legal ownership by the entity is a necessary condition for recognition but not sufficient on its own. Therefore, option (i) and (iii) account for all the necessary conditions for recognition of an asset. Option (ii) on its own does not suffice for recognition. Option (D) includes all three conditions but option (B) is more precise and accurate.

The Framework States That an Asset Should Be Recognised When