Characteristics of relevance and reliability exists

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As you know from courses that focus on financial accounting, an age-old debate exists on balance sheet valuation of assets. The historical cost principle is in effect to lend objectivity to the measure, but has been criticized as being irrelevant as many assets sit on the books for many, many years. Fair value or market value accounting has been suggested as being more relevant [and is in use for certain assets presently], but is it reliable? Thus, a trade-off between the primary qualitative characteristics of relevance and reliability exists.

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Reference no: EM131992936

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Characteristics of relevance and reliability exists : Thus, a trade-off between the primary qualitative characteristics of relevance and reliability exists.

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