Valuation and allocation assertion
Valuation and allocation concern whether assets, liabilities and equity interests are included at appropriate amounts and related valuation or allocation adjustments are appropriately recorded. The procedures depend on the reporting framework and the balance involved.
Worked example
The auditor compares inventory cost with evidence of selling prices and selling costs, and investigates obsolete items.
Common mistake
Counting inventory tests quantities but does not on its own establish its valuation.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AA | Direct | September 2026–June 2027 |
| ACCA | AAA (INT) | Direct | September 2026–June 2027 |