CERTYNEX IFRS ACADEMY

For a transaction not covered by IFRSs (case data), Gerède's management picks, out of two defensible policies, the one that spreads a large income item to 'smooth' profit over three years, with no other justification. Which requirement of the standard is at stake?

Neutrality of the information, a component of reliability.

Comparability with other entities in the industry, which means following the majority practice.

Completeness, since the income is eventually recognised.

None: smoothing profit is a recognised objective of an accounting policy.