asset or liability whose amounts are fixed or determinable in dollars without reference to future prices of specific goods or services. Their economic significance depends heavily upon the general purchasing power of money. The two types of monetary items are monetary assets and monetary liabilities. Monetary assets are those stated in current dollars needing no adjustment in the price-level balance sheet, such as cash, accounts receivable, and marketable securities at market value. Monetary liabilities are obligations payable in dollars requiring no adjustment in the price-level balance sheet, such as accounts payable and bonds payable. However, holding monetary items during a period of inflation will result in a purchasing power loss (OR GAIN) in the price-level income statement.
asset or liability whose amounts are fixed or determinable in dollars without reference to future prices of specific goods or services. Their economic significance depends heavily upon the general purchasing power of money. The two types of monetary items are monetary assets and monetary liabilities.
