The recognition criteria that an asset must meet before it may be recognised and presented in the financial statements includes: Select one: a

Accounting Aug 17, 2020

The recognition criteria that an asset must meet before it may be recognised and presented in the financial statements includes: Select one: a. having physical substance. b. verifiability results from a past event. d. relevant to management decision making

Expert Solution

Solution

The recognition criteria that an asset must meet before it is recognized and presented in the financial statements includes –

The likelihood of inflow of economic benefits to the entity

The reliable measurement of cost or value.

Hence, the option b. Verifiability is correct answer.

Explanation:

The asset’s cost or value must be reliably verifiable. The asset would be reported in the balance sheet at measured cost or value.

Also, the investment in the asset should result in inflow of economic benefits to the entity beyond the current accounting period.

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