Which of the following statements regarding interest methods of allocations is not true?
- The term “interest methods of allocation” refers both to the convention for periodic reporting and to the several approaches to dealing with changes in estimated future cash flows.
- Interest methods of allocation are reporting conventions that use present value techniques in the absence of a fresh-start measurement to compute changes in the carrying amount of an asset or liability from one period to the next.
- Interest methods of allocation are grounded in the notion of current cost.
- Holding gains and losses are generally excluded from allocation systems.