The general rule under modified historical-cost accounting is that holding gains on non-current assets should be:
A) treated as revenue in the period that the fair value of the asset changes.
B) deferred and amortised over the life of the asset (effectively decreasing depreciation expense).
C) recognised as part of income and hence, of total comprehensive income
D) never recognised.

Question

Quizplus · Accepted Answer

Under modified historical-cost accounting, holding gains on non-current assets are typically recognised as part of income and hence, of total comprehensive income. This approach reflects the increase in the economic benefits associated with the asset.

The General Rule Under Modified Historical-Cost Accounting Is That Holding