MONETARY UNIT ASSUMPTION Definition

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MONETARY UNIT ASSUMPTION assumes that values can be relevantly measured in current monetary units. It is not necessary that the currency be stable or that inflation effects be negligible. The discount rate (cost of capital) automatically takes into account expected inflationary effect on dollar or inventory values for the specific entity. This supports economic valuation and enhances comparability.

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CONVERTIBLE NOTE see CONVERTIBLE DEBT.

COST-OF-LIVING LEASE is a lease where yearly increases are tied to the cost of living index.

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