A tutorial question and its suggested solution was:

Q. What is the primary measure used for asset valuation on the statement of financial position? What is the source of this measure and justification for its use?

Solution: The primary measure used for asset valuation is historical cost. This is one of the fundamental accounting concepts being based on such values being fair, verifiable, conservative and representative of the asset at the purchase date.

Name an alternative to historic cost for measuring asset values and explain why the alternative method would be used.