Which model does ASPE permit for the measurement of capital assets?

Under Accounting Standards for Private Enterprises (ASPE), the appropriate model for measuring capital assets is the cost model. The cost model entails recognizing the asset at its cost upon acquisition, and subsequently adjusting it for any accumulated depreciation and impairment losses, but not for increases in value.

The cost model is designed to provide a straightforward and consistent framework for reporting capital assets. This model reflects the historical cost associated with the acquisition of the asset, which provides reliability since costs are actual transactions that have occurred. ASPE does not allow for the revaluation model, which would enable companies to adjust the value of capital assets to fair market value, as this model involves estimations that could introduce subjectivity and variability into financial statements.

While some other accounting frameworks, like IFRS, permit both the cost model and the revaluation model, ASPE's direction emphasizes maintaining a stable and objective measurement approach for capital assets. Thus, recognizing the nature of ASPE's principles underlines why the cost model is the sole permitted model for capital assets in this context.