FAR 2-5: Financial Reporting & Changing Prices

Question 1

What are monetary items?

Answer 1

• Assets & liabilities that are fixed (& determinable) in amount by contract or in terms of number of dollars
• Examples include cash, accounts & notes receivable, accounts & notes payable
• These items are already stated in constant dollars

Question 2

What are nonmonetary items?

Answer 2

• All assets & liabilities that are not monetary
• Examples are inventories, property, plant, & equipment, & capital stock. These items need to be restated to constant dollars