Measurement in financial reporting
Measurement in Financial Reporting is the sixth report in our Information for Better Markets campaign.
About the report
Measurement in Financial Reporting considers five principal measurement bases
- historical cost
- value to the business
- fair value
- realisable value
- value in use
It does not recommend one basis as the best for all items in accounts in all circumstances, but suggests that in making decisions on measurement requirements it may be appropriate:
- to adopt a mixed approach for different items in accounts
- to distinguish between different types of entity in accordance with their industry, ownership and governance structure, and size.
The report also argues that standard-setters' decisions on financial reporting measurement should be subject to the same principles of good regulatory practice as other forms of regulation.
This implies a significantly more evidence-based approach to measurement issues than has typically been the case hitherto. To support an evidence-based approach, the report suggests topics for research on measurement issues.
For printed copies of the report, please call the Institute's technical department on +44 (0)20 7920 8634.