An Irrelevant Cost Is One That Is the Same for More

question 105

True/False

An irrelevant cost is one that is the same for more than one alternative and has no bearing on future decisions.

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Definitions:

AASB 137

An Australian accounting standard that deals with the accounting and reporting of provisions, contingent liabilities, and contingent assets.

Provision for Removal

An amount set aside or reserved in the accounts to cover the future cost of dismantling an asset and restoring the site, typically related to property, plant, and equipment.

E&E Asset

Exploration and Evaluation Asset, associated with the costs of finding minerals, petroleum, or natural gas deposits, including drilling and evaluation costs.

E&E Expense

Expenditures related to exploration and evaluation activities in the minerals and energy sectors, often recognized as costs in the period they are incurred unless they meet certain capitalization criteria.