The standards relating to the treatment of interest and dividend income differ under ASPE and IFRS. Which of the following statements is INCORRECT?
A) IFRS requires the use of the effective-interest method when interest income is to be reported separately.
B) IFRS requires certain dividends to be recognized in other comprehensive income.
C) ASPE allows the use of either the straight-line or effective-interest method.
D) When using the equity method, IFRS allows a dividend from an investee to be recorded as income, while ASPE does not.

Question

Quizplus · Accepted Answer

Under both IFRS and ASPE, when using the equity method, dividends from an investee are not recorded as income. Instead, they reduce the carrying amount of the investment.

The Standards Relating to the Treatment of Interest and Dividend