CAF-6 · Chapter 1 · Question 9 of 15
According to IFRIC 1, if an entity uses the cost model for an asset, how should a decrease in the estimated decommissioning liability due to a change in the discount rate be accounted for?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Deducted from the cost of the related asset.
Explanation
Under the cost model, changes in the existing decommissioning liability (such as changes due to the discount rate) are added to or deducted from the cost of the related asset in the current period.
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