# Current Value Accounting Technique

### 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.

## Example

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:

## Solution

Conversion of Assets at Current Values (2024 Index)

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