Which of the Following Statements Is Incorrect

question 6

Multiple Choice

Which of the following statements is incorrect:

• A) Adjustments for the gain/loss on intragroup sale of property, plant and equipment are made in all periods after the sale.
• B) Where the transferred assets are depreciable, adjustments are made to depreciation accounts (for the current period depreciation) or to the retained earnings account (for the previous periods' depreciation).
• C) As depreciation reflects the use of the asset by the group, the depreciation adjustments are considered to be realising a part of the gain/loss on the intragroup sale of property, plant and equipment.
• D) As the intragroup sale of property, plant and equipment impacts on the profit and the carrying amount of assets, adjustments for the tax effects are also required.

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Definitions:

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