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The Conceptual Framework says that
– liability at current cost is the undiscounted amount of cash or cash equivalent that would be required to settle the obligation currently; and
-liability at settlement value is the undiscounted amounts of cash or cash equivalents expected to be paid to satisfy the liabilities in the normal course of business.Can anyone of you help differentiate between the two measurement bases of liability by using examples?
“at current cost” is the figure you would have to pay now
“at settlement value” is the amount that you expect you will have to pay when you do, in fact, pay
But, to be totally frank with you, it is highly improbable that anything like this is going to come in an F7 exam, nor even in a P2 exam
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