Grand Canyon University Tracking Systems for Data Management Discussion – Description
As indicated in the reading, U.S. GAAP requires the use of historical cost for valuing most assets while IFRS permits the use of fair value. Using the first letter of your last name, answer the question below for which the letter of your name falls in the range. Use your own words to summarize the information from the textbook. Provide proper citations for resources used, including the textbook.
A – M: Assume you are in support of the historical cost basis as required by GAAP. Discuss why you think the historical cost approach best values the long-term assets on the balance sheet. In addition, provide an example to support your position.
N – Z: Assume you are in support of the fair value basis as recommended by IFRS. Discuss why you think the fair value approach best values the long-term assets on the balance sheet. In addition, provide an example to support your position.
Participate in follow-up discussion by responding to classmates who posted about the opposite approach and professionally debate why the approach you reported on is the better method for valuing the long-term assets on the balance sheet.
Lenee Burgess
july
7,
2023, 7:00 AM
Unread
Assuming I was in support of the historical cost basis as required by the GAAP I would argue that it was more historically sount than the IFRS. Historical data allows us to have information of what consumers were charged and how thost prices have effected the market. It allows us to see how prices have been raised, lowered, and fluctuated in order to understand how it’s effected the market in the past as well as the trends of inflation and market values to help make an informed decision on what something should cost. It has been said that history repeats itself so what better way then to continue to analyze history and know how it’s effected the long-term assets on the balance sheet in the past to prepare for a better future. “As the term implies, value is measured as the cash or cash?equivalent price of the asset on the date it was acquired”(Young, p.75, 2019). An example of this would be to look at the historical value of a car once a car has so many miles and its age to see what the historical depreciation of the general model of that specific car to see what it could be valued at.
Reference:
Young, S. D., Cohen, J., & Bens, D. A. (2019). Corporate financial reporting and analysis: A global perspective (4th ed.). Wiley. ISBN-13: 9781119494577
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