In accounting, what must all items be reported with, according to the monetary unit principle?

The monetary unit principle in accounting states that all financial transactions must be recorded and reported in terms of a common unit of currency. This principle ensures that the financial statements are coherent and consistent, allowing for easier comparison of financial data over time and across different entities.

By expressing all accounting information in a single currency, it eliminates confusion and enables stakeholders to easily analyze and interpret the financial health of a business. For example, if a company operates in multiple countries, the monetary unit principle necessitates that all revenue, expenses, assets, and liabilities be translated into a single currency, making it possible to provide a unified financial picture.

This principle does not accommodate for the use of multiple currency forms, estimates, or projections, nor does it limit reporting to cash values only. Instead, it prioritizes the clarity and standardization that a common currency provides, facilitating effective financial analysis and decision-making.