Question

Identify which of these measurement methods are not used in measuring liabilities?

1) Adjusted present value
2) Acquisition cost
3) Fair Value
4) Originally incurred obligations

Answer 1

Among the measurement methods listed, originally incurred obligations is not used in measuring liabilities. The other methods are Adjusted present value, Acquisition cost, and Fair Value.

Step-by-step explanation:

Among the measurement methods listed, Originally incurred obligations is not used in measuring liabilities. Let's briefly explain the other three measurement methods:

1. Adjusted present value, or APV, is a method used to calculate the present value of a project's cash flows by taking into account the effects of financing.
2. Acquisition cost refers to the cost incurred by a company to acquire a liability, such as the purchase price of a piece of equipment.
3. Fair Value is a method used to measure liabilities at their estimated current market value.

Originally incurred obligations do not represent a specific measurement method used in measuring liabilities.