Task
Assignment -1
Question -1 (10 Marks)
Word limit 2000 words
Chambers, Edward and Bell, and Sterling have contributed immensely to accounting theory through their work on measurement bases. The aim of this work has been to minimise some of the discrepancies in financial reporting arising from the use of historical cost as a basis of measurement. Despite these efforts, historical cost accounting is still used within financial accounting.
1.1 Why do you think that historical cost accounting has remained an accepted method of accounting and how does this continue to affect financial reporting?
1.2 Describe and provide reasons for the best measurement method to use when measuring the value of roads and highways.
Question – 2 (5 marks)
Word limit 1000 words
The IASB Conceptual Framework states that the fundamental qualitative characteristics of useful information are relevance and representational faithfulness. Must both of these qualitative characteristics be satisfied before particular information is included within a financial report? Explain your answer.
Rationale
This assignment is designed to assist you in:
• gathering and integrating knowledge in order for you to analyse and comment critically on the application of accounting theories;
• critically appraising the objectives of accounting and relate them to the various concepts of accounting;
• analysing the possible usefulness of alternative measurement systems to historical cost;
• developing your learning through the application of the concepts covered in topics 1 to 3