Assume that the IASB (and AASB) is in the process of writing an accounting standard on accounting for water resources, and has received submissions that can be divided roughly into two camps — measurement of the resources at cost, and measurement at fair value. The process has reached the stage of applying the following qualitative characteristics of financial information.

		Cost				Fair value
Tick which of the two measures has greater: relevance materiality consistency prudence substance over form freedom from bias neutrality objectivity reliability timeliness comparability understandability faithful representation verifiability			________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________			________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________

Required

A. Place a tick in one of the columns against each characteristic.

B. On the basis of this analysis, discuss which measure should be chosen for water resources.