What is a key difference between IFRS and ASPE regarding capital assets?

The choice that identifies a key difference between IFRS (International Financial Reporting Standards) and ASPE (Accounting Standards for Private Enterprises) regarding capital assets is that ASPE permits the capitalization of borrowing costs. Under ASPE, companies can capitalize interest costs that are incurred during the construction period of qualifying assets, which can enhance the carrying amount of those assets on the balance sheet. This practice allows firms to properly reflect the cost of financing tied to the acquisition or construction of capital assets.

In contrast, under IFRS, while there is also a provision for the capitalization of borrowing costs, the criteria may be more stringent. IFRS requires entities to capitalize borrowing costs that are directly attributable to the acquisition, construction, or production of a qualifying asset. This means that while both frameworks allow capitalization, the application and context can vary, which highlights how ASPE provides a broader and perhaps simpler application compared to the more detailed guidance under IFRS.

The other options do not accurately differentiate between IFRS and ASPE. For example, ASPE does not require the use of both the cost and revaluation models for revaluation of property; only IFRS allows for both models under certain circumstances. Additionally, IFRS does allow models for asset valuation, contrary to the statement in