Valuation for financial reporting
Valuation for financial reporting is the determination of an amount for an asset, liability or other item using the applicable measurement basis. Depending on the standard, the basis may involve cost, fair value or another measure. Auditors evaluate the selected basis, method, inputs and disclosures.
Worked example
An auditor checks the cost and depreciation records of equipment measured under the cost model and assesses any impairment indicators.
Common mistake
Do not define every valuation as fair value: the required measurement basis depends on the applicable standard.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AAA (INT) | Supporting | September 2026–June 2027 |