Professional Documents
Culture Documents
Types of Events
External events – events that involve an external party.
a. Exchange (reciprocal transfer) – reciprocal giving and receiving
b. Non-reciprocal transfer – “one way” transaction
c. External event other than transfer – an event that involves changes in the
economic resources or obligations of an entity caused by an external party or
external source but does not involve transfers of resources or obligations.
Internal events – events that do not involve an external party.
d. Production – the process by which resources are transformed into finished
goods.
e. Casualty – an unanticipated loss from disasters or other similar events.
Measurement
The several measurement bases used in accounting include, but not limited to, the
following:
1. historical cost,
2. fair value,
3. present value,
4. realizable value,
5. current cost, and sometimes inflation-adjusted costs.
The most commonly used is historical cost. This is usually combined with the
other measurement bases. Accordingly, financial statements are said to be
prepared using a mixture of costs and values.