GTM-TNHWN3R Verification: 8022f68be7f2a759

Characteristics of Monetary Assets

Two key characteristics of these assets include:

  1. Change in real terms: Monetary assets are fixed in their dollar terms but are subject to changes in real terms, i.e., a relative change in buying capacity. For example, a sum of $100 can only buy you 2 dozens of apples now, compared to 3 dozens previously. This means that there has been a decline in real terms amounting to 33%, even though the dollar amount remains the same.

  2. Restatements in financial statements: Monetary assets are not subject to a restatement of their recorded value in financial statements. A non-monetary asset like land may be subject to depreciation or appreciation, depending upon

market conditions.

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