An Example of Where the Prudence Assumption Leads to a Reduction

Multiple Choice

An example of where the prudence assumption leads to a reduction in the valuation of an asset is:

A) valuing inventory at the lower of cost and net realisable value.
B) taking an upward revaluation of an asset to a reserve rather than including it in the profit calculation.
C) development expenditure capitalised as an asset rather than written off as an expense.
D) All are examples.