Which accounting standard requires the use of systematic and rational allocation of depreciation?

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Q: Which accounting standard requires the use of systematic and rational allocation of depreciation?

Solution: Both IFRS and GAAP require systematic and rational allocation of depreciation.

Steps: 4

Step 1: Understand what depreciation is. Depreciation is the process of allocating the cost of a tangible asset over its useful life.
Step 2: Learn about accounting standards. There are two main accounting standards: IFRS (International Financial Reporting Standards) and GAAP (Generally Accepted Accounting Principles).
Step 3: Know that both IFRS and GAAP require businesses to allocate depreciation in a systematic way. This means that the cost of the asset should be spread out evenly or based on a rational method over time.
Step 4: Recognize that systematic allocation means using a consistent method each year, while rational allocation means the method should make sense based on how the asset is used.