Current Value Accounting Technique

Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on February 04, 2024

Under the current value accounting method, all assets and liabilities are shown in the balance sheet at their current values.

The difference in the value of net assets at the start and end of the year is known either as profit or loss. Significantly, determining current values is not a straightforward task.


Horizon Ltd. Balance Sheet

The general index was 100 in 2014 (i.e., the base year). It was 200 in 2023 and 250 in 2024. No dividend was paid in 2024.

Required: Prepare the following:


Conversion of Assets at Current Values (2024 Index)

Current value accounting technique example

Conversion of liabilities at current value 2024

Sundry Creditors: 250/200, 25,000, 30,000, 31,250, 30,000

Calculation of loss for holding current assets


Loss = Current values - Historical values of current assets

= 81,250 - 65,000 = $16,250

Calculation of gain from current liabilities

From Sundry Creditors (Current Value - Historical Values)

= 31,250 - 25,000 = $6,250

Net loss from holding current assets and current liabilities

= 16,250 - 6,250 = $10,000

Supplementary Income Statement at Current Values


Supplementary Comparative Balance Sheet at Current Values

Current value accounting technique solved example

Current Value Accounting Technique FAQs

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.