The inclusion of increments and decrements of non-current assets required by the comprehensive income approach:
A) may reduce the reliability of the financial statements
B) must always be confirmed as an arms-length transaction
C) A and B above
D) None of the above

Question

Quizplus · Accepted Answer

The inclusion of increments and decrements of non-current assets required by the comprehensive income approach may reduce the reliability of the financial statements because it involves estimating the fair value of the assets, which is subjective and may not be accurate. This could affect the decision-making of users of the financial statements. There is no requirement for these transactions to be confirmed as arms-length, so option B is incorrect. Therefore, the correct answer is A.

The Inclusion of Increments and Decrements of Non-Current Assets Required