IFRS require the initial cost of operational assets to be
A)depreciated using the straight-line method
B)depreciated to a zero residual value
C)depreciated over one composite useful life
D)allocated to significant components and depreciated separately

Question

Quizplus · Accepted Answer

IFRS requires that the initial cost of operational assets be allocated to significant components and depreciated separately. This approach is known as componentization or asset disaggregation, and it allows for a more accurate reflection of the assets' economic benefits and useful lives. Under this method, each component of an asset that has a different useful life or pattern of consumption is depreciated separately based on its individual cost and estimated useful life. This approach provides greater transparency and allows for more accurate reporting of the assets' useful lives and depreciation expenses.

IFRS Require the Initial Cost of Operational Assets to Be