The Financial Accounting Standards Board (FASB)s Conceptual Framework presents five acceptable measurement attributes for financial reporting:
- Historical cost
- Replacement cost
- Current market value
- Net realizable value
- Present value
Even though all of these measurement attributes are acceptable for financial reporting purposes, most of the financial statements elements are measured by historical cost.
Write an academic paper of 750 to 1475 words (3 to 5 pages) that compares the validity and reliability of historical cost to the other measurement attributes. Your paper should include discussion of:
- The qualitative characteristics of each measurement attribute, including a definition and examples.
- The assumptions related to various measurement attributes.
- Your opinion on whether using historical cost has positive or negative effects on the informational value of a companys financial reporting.
Be sure to:
- Follow accepted research approaches and citation format (APA style).
- Convey your understanding of the readings and concepts and their application to the topic.
- Write in an organized and coherent way.
- Check for and correct spelling, sentence structure, and grammatical errors.
- Demonstrate graduate-level analytical skills. [MO2.1, MO2.2, MO2.3]
