More Than One Measurement Basis – FAQ | IFRS

More than one measurement basis

Sometimes, consideration of the factors described in Measurement choices for recording transaction may lead to the conclusion that more than one measurement basis is needed for an asset or liability and for related income and expenses in order to provide relevant information that faithfully represents both the entity’s financial position and its financial performance. More than one measurement basis

In most cases, the most understandable way to provide that information is:

  1. to use a single measurement basis both for the asset or liability in the statement of financial position and for related income and expenses in the statement(s) of financial performance; and More than one measurement basis
  2. to provide in the notes additional information applying a different measurement basis.

However, in some cases, that information is more relevant, or results in a more faithful representation of both the entity’s financial position and its financial performance, through the use of:

  1. a current value measurement basis for the asset or liability in the statement of financial position; and
  2. a different measurement basis for the related income and expenses in the statement of profit or loss (see Profit or loss and Other comprehensive income Conceptual Framework 7.17–7.18).

In selecting those measurement bases, it is necessary to consider the factors discussed in Measurement choices for recording transaction.

In such cases, the total income or total expenses arising in the period from the change in the current value of the asset or liability is separated and classified (see Classification of income and expense and Profit or loss and Other comprehensive income Conceptual Framework 7.14 – 7.19) so that: More than one measurement basis

  1. the statement of profit or loss includes the income or expenses measured applying the measurement basis selected for that statement; and
  2. other comprehensive income includes all the remaining income or expenses. As a result, the accumulated other comprehensive income related to that asset or liability equals the difference between: More than one measurement basis
    1. the carrying amount of the asset or liability in the statement of financial position; and
    2. the carrying amount that would have been determined applying the measurement basis selected for the statement of profit or loss.

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