The principal measurement bases for initial and for subsequent measurement in accordance with IPSASs include cost, fair value and present value. Since these measurement bases are fundamental to numerous IPSASs, they will be introduced in this chapter.
In this context it has to be stated that the IPSASB covers measurement in phase 3 of its conceptual framework project (cf. chapter 2.7). Phase 3 will obviously have an impact on the measurement bases in accordance with IPSASs. Discussions of the board have shown that it will not be possible to specify a single measurement basis for all the elements of financial reporting. The IPSASB therefore is in the process of discussing the appropriate measurement basis for the different types of assets and liabilities.
In addition to the principal measurement bases underlying the IPSASs, most of which correspond to those of IFRSs, certain IPSASs introduce further specific bases for initial or subsequent measurement such as net realizable value and current replacement cost in IPSAS 12, recoverable (service) amount in IPSAS 17, 21 and 26 or value in use under IPSAS 21 and 26. These measurement bases are presented in more detail in the context of the relevant standard.
As defined in IPSAS 16.7, cost is the amount of cash or cash equivalents paid or the fair value of any other consideration given to acquire an asset at the time of its acquisition or construction. Cost thus also includes all consideration ...