Current cost of a liability
In the Conceptual Framework, current cost is an entry-value measurement basis: it reflects the terms on which an equivalent liability could be incurred now. It is distinct from the amount required to transfer or settle an existing liability, and from historical proceeds when market conditions have changed. A particular IFRS standard determines whether a current-cost measurement is actually required.
Worked example
An entity could receive $98,000 today for taking on an equivalent obligation and would incur $2,000 in transaction costs. On these assumptions its current cost is $96,000.
Common mistake
Calling current cost the amount needed to settle the liability; that is a different measurement concept.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FR | Direct | September 2026–June 2027 |
| ACCA | SBR | Supporting | September 2026–June 2027 |
