Exam 15: International Financial Reporting Standards

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

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

IFRS stands for:

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

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

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

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

Suppose a company has research costs of $100,000 and development costs of $200,000 for the year. Under IFRS, what amount would be reported as an expense in the current year's income statement?

Which of the following is not a reason why accounting differs across countries?

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).

Below are seven reasons for differences in accounting practices among countries. For each reason, at least two options are provided. For each reason, select the option that best describes Germany.

Which inventory cost flow assumption is allowed under U.S. GAAP but not under IFRS? Explain why some U.S. companies will lobby strongly to keep this method as an allowable alternative.

Suppose a company has research costs of $100,000 and development costs of $200,000 for the year. Under U.S. GAAP, what amount would be reported as an expense in the current year's income statement?

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

Why are some U.S. companies opposed to elimination of the LIFO inventory method?

Compared to that in the U.S, the cost to companies in other countries of documenting effective internal controls is:

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.

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

Below are seven reasons for differences in accounting practices among countries. For each reason, at least two options are provided. For each reason, select the option that best describes the United States.