Question

In no less than two (2), singled-spaced, pages, and no more than four (4) pages (i), describe the Unifying Framework of the Universal Measure of Asset Value & Rate, (ii) describe how this framework can be applied to the "assets"

Answer 1

Accounting standards specify the assets and liabilities that are recognized in financial statements and how they are measured. This ED identifies the measurement concepts that guide the in the selection of measurement bases for international public sector accounting standards and by prepares of general purpose of financial statements in selecting measurement bases for assets and liabilities where there are no requirements in IPSAS.The ED is concerned with the measurement bases that may be used in financial statements. It doesn't consider application of these bases to other general purpose financial reports outside the financial statements. Because the definitions of elements are linked the amount at which assets and liabilities are measured will affect of the amount of revenue, expenses and other elements recognized therefore the selection of measurement of basis is important not only for the statement of financial position but also for the reporting of elements in the financial statements. Conceptual framework identifies service recipients and resource providers and their representative as primary users of GPFRS and states that the objectives of financial reporting by public sector entities to provide information about the entity that is useful to users of GPFRS for accountability purposes and for decision-making purposes. It identifies a number of specific information needs of service recipients and resource providers and their representatives. The selection of a measurement basis is particularly important to meeting the information needs of users for accountability and decision making purposes if it enables assessments of: - Financial capacity - the capacity of the entity to continue the fund its activities and meet its operational objectives in future Operational capacity - the physical and other resources available to support the provision of services in future period. The cost of services provided in the period. The selection of a measurement basis may also affect assessments of The capacity of the entity to adapt to changing circumstances Whether current levels of taxes and other income are sufficient to maintain the volume and quality of services currently provided Whether resources have been used economically and efficiently. The following measurement bases are required for assets : a. Historical cost b. Market value C. Replacement cost d. Net selling price e. Value in use. Measurement bases for assets, entry values reflect the cost of purchase and exit values reflect the cost of sale. Historical cost,considered in section 2 is an entry value basis. An exit value also reflects the amount that will be derived from the asset from its use.