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Exam 15: International Financial Reporting Standards

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Question 1

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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.

A) True
B) False

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Question 2

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

A) True
B) False

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Question 3

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Which inventory cost flow assumption is allowed under U.S.GAAP but not under IFRS?

Suppose a severe storm floods a company's headquarters,causing damages to the building of $300,000 and destruction of inventory of $200,000.Because of the unusual nature of this event,the company had no flood insurance to cover these losses.Under U.S.GAAP,how much would the company report as an extraordinary loss in the current year's income statement?

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.

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

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

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

What is the main objective of the International Accounting Standards Board (the IASB)?

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.

Suppose a company pays interest of $10,000 for the year on borrowed amounts due in two years.Under IFRS,what is the most the company can report this year as cash outflows from financing activities related to this item?

The body primarily responsible for establishing a single set of global accounting standards is the:

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

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?

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

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

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).

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

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