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Tags
#cfa-level-1 #reading-25-understanding-income-statement
Question
Grouping depreciation on manufacturing equipment and depreciation on administrative facilities into a single line item called “depreciation” is an example of grouping by [...] of the expense.
Answer
grouping by nature

Tags
#cfa-level-1 #reading-25-understanding-income-statement
Question
Grouping depreciation on manufacturing equipment and depreciation on administrative facilities into a single line item called “depreciation” is an example of grouping by [...] of the expense.
Answer
?

Tags
#cfa-level-1 #reading-25-understanding-income-statement
Question
Grouping depreciation on manufacturing equipment and depreciation on administrative facilities into a single line item called “depreciation” is an example of grouping by [...] of the expense.
Answer
grouping by nature
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Grouping together expenses such as depreciation on manufacturing equipment and depreciation on administrative facilities into a single line item called “depreciation” is an example of a grouping by nature of the expense.

Original toplevel document

2. COMPONENTS AND FORMAT OF THE INCOME STATEMENT
t. IFRS additionally require that line items, headings, and subtotals relevant to understanding the entity’s financial performance should be presented even if not specified. Expenses may be grouped together either by their nature or function. <span>Grouping together expenses such as depreciation on manufacturing equipment and depreciation on administrative facilities into a single line item called “depreciation” is an example of a grouping by nature of the expense. An example of grouping by function would be grouping together expenses into a category such as cost of goods sold, which may include labour and material costs, depreciation, some sala

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