Current IASB standards make use of a number of different measurement approaches resulting in annual reports being prepared on the basis of a mixed measurement model. The IASB has for a number of years advocated a move to a single measurement model, being Fair Value. Choice of measurement approach impacts on the qualitative characteristics or quality of accounting information produced.

You have recently been appointed as a graduate accountant in a company listed on the Australian Securities Exchange Top 200 (ASX200)Woolworths, and are currently reporting to the Chief Financial Officer (CFO). The CFO ofWoolworthshas been asked to respond to a recently convened focus group of the Australian Accounting Standards Board (AASB) on whether the standard setters should consider a move to a single measurement approach.

You are to research and comment on why measurement is a controversial accounting issue and present your findings as follows:

A report to update the CFO and the board of directors on the impact of choosing different measurement approaches on the qualitative characteristics or quality of accounting information produced. Your report should critically evaluate the use of a mixed measurement approach, comment on the approachWoolworthshas taken (e.g. mixed or single measurement approach) by referring to the Notes on Significant Accounting Policies in its latest annual report, stating whether you support or disagree with the approach your company has taken.

(i)Provide a description of the various measurement approaches that your company uses. (500 worlds)