Because IFRS do not permit the use of LIFO,inventory holding gains are included in income.

IFRS prohibits the use of Last-In, First-Out (LIFO) accounting method for inventory valuation. Under LIFO, the cost of the latest goods purchased or produced is matched with the revenue from the latest sales, resulting in a lower profit margin during times of inflation. Since IFRS does not allow LIFO, companies must use other methods such as First-In, First-Out (FIFO) or weighted average cost accounting, which may result in inventory holding gains being included in income. Thus, the statement is true.