What
is measurement of transaction?
The measurement is concept
associated for determining the value of an element of transition. The value may
be determined by number of ways known as measurement bases. These measurement
bases included historical bases, current cost bases, and realizable value
bases.
What
are historical cost bases?
The cost which was
actually paid for the acquisition of asset is known as historical cost. It is
important to mention that many transactions are initially recognized at
historical cost.
What
are current cost bases?
This is the cost which the
entity would be required to pay in case of asset replacement, therefore this
bases is also known as replacement measurement bases.
What
are present value bases?
These are discounted value
of future cash flows i.e. discounted value of cash inflow from assets and
discounted value of cash outflow required to settle the liability.
