Exam 15: International Financial Reporting Standards

When preparing a statement of cash flows,IFRS allows companies to report cash outflows from interest payments as either operating or financing cash flows,while U.S.GAAP requires these outflows to be reported as only operating activities.

In common law countries (such as the U.S.,the U.K.,and Canada),greater emphasis is placed on public information than in code law countries (such as France and Germany).

Under IFRS,inventory write-downs due to using the lower-of-cost-or-market rule are allowed to be reversed in a future year if the market value subsequently increases.

When a country establishes financial reporting rules that closely resemble tax reporting rules,reported accounting profits tend to be:

IFRS allows,but does not require,revaluation of property,plant and equipment to fair value.

The primary objective of the IASB is to develop accounting standards in the U.S.

For countries whose tax standards are closely tied to financial reporting standards (Continental Europe and Japan),accounting earnings tend to be lower so companies can minimize tax payments.

By late 2007,over 100 jurisdictions,including China,Australia,and all of the countries in the European Union (EU),either require or permit the use of IFRS.

What does it mean to revalue a long-term asset? How do U.S.GAAP and IFRS differ regarding revaluation of long-term assets?

Convergence of accounting practices is expected to increase the flow of investment across borders.

Countries that have different rules for financial accounting and tax accounting,rely more on equity financing,and have historical political and economic ties with Great Britain are referred to as what types of countries?

Which of the following characteristics of a country most likely affects the extent of companies' financial disclosure practices?

How is the organization responsible for standard setting in the U.K.different from that in France? Which of these organizations is closer to the FASB in the U.S.?

Which of the following statements is true regarding revaluation of property,plant,and equipment to fair value?

Assuming rising costs,the switch from LIFO to FIFO or average cost would most likely have what effect(s)?

More economically developed economies (the U.S.and the U.K.)have a need for more complex accounting standards.

Describe at least five reasons why accounting practices differ across countries.Which reason do you think is most important? Explain why.

Would a company be more likely to report a contingent liability under U.S.GAAP or IFRS?

Countries that have similar rules for financial accounting and tax accounting,rely more on debt financing,and have historical political and economic ties with Germany are referred to as what types of countries?

The Norwalk Agreement formalizes the commitment between the FASB and IASB to the convergence of U.S.GAAP and IFRS.