Asked by Brenna Caldwell on Jul 27, 2024
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In measuring the value of a liability, which measurement base uses the discounted future net cash outflows that are expected to settle the obligation in the normal course of business?
A) Realisable value.
B) Current cost.
C) Historical cost.
D) Present value.
Measurement Base
The method or approach used in determining the value of assets and liabilities for accounting and reporting purposes.
Present Value
The current worth of a future sum of money or stream of cash flows, given a specified rate of return. Present value considers the time value of money.
Discounted Future
Refers to the process of estimating the present value of an expected future cash flow by applying a discount rate to account for the time value of money.
- Acquire knowledge on the administration and structural setup of international financial reporting norms and organizations.
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Learning Objectives
- Acquire knowledge on the administration and structural setup of international financial reporting norms and organizations.
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