A Level Accounting (9706)•9706/12/M/J/21
Explanation
Incorrect Statement on Depreciation Policy
Steps:
- Review each option against standard accounting principles for depreciation.
- Identify that depreciation allocates asset cost over useful life, per IAS 16.
- Confirm exceptions like land and consistent methods for similar assets.
- Spot the false absolute claim in option A.
Why A is correct:
- Accounting standards (e.g., IAS 8) allow changes in accounting policy if it provides more reliable, relevant information, contradicting the "never" claim.
Why the others are wrong:
- B: Matches the core definition of depreciation as systematic cost allocation.
- C: Freehold land has indefinite useful life, so it is not depreciated under IAS 16.
- D: IAS 16 requires the same depreciation method for assets of the same class to ensure consistency.
Final answer: A
Topic: Accounting for non-current assets
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