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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VEBA is Voluntary Employees Benefits Association.

EXCESS EARNINGS is that amount of anticipated benefits that exceeds a fair rate of return on the value of a selected asset base (often net tangible assets) used to generate those anticipated benefits.

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