Which of the Following Statements Is INCORRECT Regarding the Recording

question 45

Multiple Choice

Which of the following statements is INCORRECT regarding the recording of the related increase or accretion in the carrying amount of an asset retirement obligation (ARO) ?

• A) Under ASPE, it is recognized as interest expense.
• B) Under ASPE, it is recognized as an operating expense (but not as interest expense).
• C) Under IFRS, it is recognized as a borrowing cost.
• D) The amount should be calculated using the same discount (interest rate) as was used to calculate the initial present value of the ARO.

---

Definitions:

Selective Retention

The process by which individuals remember information that is consistent with their beliefs and attitudes, while forgetting or ignoring contradictory information.

Point-Of-Purchase Displays

In-store advertising or marketing materials positioned at retail checkout areas or other point-of-sale locations to encourage impulse purchases or inform customers about products.

End-Aisle Displays

Promotional displays located at the end of store aisles, used to catch shoppers' attention and promote products, often accompanied by special offers.

Extended Service Warranties

Additional coverage that consumers can purchase to extend the warranty period of a product, providing longer protection against defects or failures.