Research_on_Measurement.docVIP

Background The measurement project would seek to resolve issues and determine a consistent approach related to selection of the appropriate measurement objective for items recognised in the financial statements. The Canadian Accounting Standards Board AcSB has undertaken a Research Project on behalf of the IASB to analyse the various measurement objectives in financial accounting. The purpose of the project is to identify, consider, and make recommendations with respect to issues related to the selection of an appropriate measurement objective or set of objectives. The IASB project would be likely to result in amendment or expansion of the discussion of measurement in the Framework for the Preparation and Presentation of Financial Statements the Framework . The former IASCs Present Value Project addressed an aspect of this issue. The IASB Framework acknowledges that a variety of measurement bases are used today in varying combinations in financial statements, including historical cost, current cost, net realisable settlement value and present value. Historical cost is most common. The Framework does not include concepts or principles for selecting which measurement basis should be used for particular elements of financial statements or in particular circumstances. Discussion at the June 2001 IASB Meeting At its meeting in June 2001, the Board discussed fair value, replacement cost, net selling price, and value in use as bases for measurement, including how to define them and difficulties in applying them. Observations made during the meeting about the various measurement bases were: Fair Value The definition from the IAS Bound Volume was discussed, difficulties in implementing such a model were identified with respect to: Measuring real assets, e.g. tangible plant and equipment where separate cash flows do not exist Instances where there is no or, alternatively, multiple markets Significant transaction costs Replacement Cost A working definition of