What are the Assumptions in IFRS..??
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Q) What are the Assumptions in IFRS..??
ANSWER:-
Four underlying assumptions characterizes the IFRS: going concern, accrual basis, stable measuring unit assumption and units of cost purchasing power.
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Explanation:
1. Accrual Assumption: The transactions are recorded in the books of accounts on accrual basis, i.e. as and when they occur and not when the settlement of transactions takes place.
2. Going Concern Assumption: It is assumed that life of business is infinite, i.e. the entity will continue its operations for an indefinite period.
3. Fair Value: Assets should be reflected at current i.e. fair value.
4. Constant Purchasing Power Assumption: It means value of capital be adjusted to inflation in the economy at the end of the financial year.
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