Measurement uncertainty – Uncertainty that arises when the result of applying a measurement basis is imprecise and can be determined only with a range.
Measurement uncertainty arises when a measure cannot be determined directly by observing prices in an active market and must instead be estimated.
The level of measurement uncertainty associated with a particular measurement basis may affect whether information provided by that measurement basis provides a faithful representation of an entity’s financial position and financial performance. A high level of measurement uncertainty does not necessarily prevent the use of a measurement basis that provides relevant information.
However, in some cases the level of measurement uncertainty is so high that information provided by a measurement basis might not provide … Read more