Question

All of the following statements are true regarding IFRS accounting for property, plant, and equipment except:

A. under IFRS, interest cost incurred during construction must be capitalized.
B. under IFRS, depreciation is viewed as an allocation of cost over an asset's life.
C. under IFRS, units-of-production depreciation is not permitted.
D. Under IFRS, a fair value test is used to measure impairment loss

Answer 1

All of the given statements are true regarding IFRS accounting for property, plant, and equipment except units-of-production depreciation is not permitted.

Step-by-step explanation:

All of the given statements are true regarding IFRS accounting for property, plant, and equipment except C. under IFRS, units-of-production depreciation is not permitted.

Under IFRS, interest cost incurred during construction must be capitalized. This means that the interest cost is added to the cost of the asset.

Additionally, under IFRS, depreciation is viewed as an allocation of cost over an asset's life. Depreciation recognizes the gradual decline in value of an asset over time.

Finally, under IFRS, a fair value test is used to measure impairment loss. This test compares the carrying amount of an asset to its fair value in order to determine if any impairment loss needs to be recognized.