Question 1

How does the definition of asset impairment differ between IAS 36 and U.S.GAAP?

Accepted Answer

A) U.S.GAAP does not consider selling price in determining impairment, but IAS 36 does. 
B) U.S.GAAP considers cash flows in assessing value of continued use, but does not discount them, whereas IAS 36 requires discounting in assessing asset impairment. 
C) Asset impairment is more likely to occur under IAS 36 than under U.S.GAAP. 
D) All of the above are differences between IAS 36 and U.S.GAAP. 
A) U.S.GAAP does not consider selling price in determining impairment, but IAS 36 does. 
B) U.S.GAAP considers cash flows in assessing value of continued use, but does not discount them, whereas IAS 36 requires discounting in assessing asset impairment. 
C) Asset impairment is more likely to occur under IAS 36 than under U.S.GAAP. 
D) All of the above are differences between IAS 36 and U.S.GAAP.

Question 2

Synergy Ltd.purchased a building in 2008 for €20,000,000 and as of December 31, 2014 had recorded accumulated depreciation on the building of €6,000,000.On December 31, 2014, the company conducted its first revaluation when the fair value was €24,000,000.Under IAS 16, the journal entry recorded on this date would include:

Accepted Answer

A) a credit to Revaluation Surplus-Building for €10,000,000. 
B) a debit to Revaluation Surplus-Building for €14,000,000. 
C) a debit to Loss on Revaluation-Building for €14,000,000. 
D) a credit to Loss on Revaluation-Building for €10,000,000. 
A) a credit to Revaluation Surplus-Building for €10,000,000. 
B) a debit to Revaluation Surplus-Building for €14,000,000. 
C) a debit to Loss on Revaluation-Building for €14,000,000. 
D) a credit to Loss on Revaluation-Building for €10,000,000.

Question 3

Under IAS 38, which of the following items is specifically EXCLUDED from being recognized as an internally generated intangible asset?

Accepted Answer

A) Computer software costs 
B) Copyrights 
C) Customer lists 
D) Motion picture films 
A) Computer software costs 
B) Copyrights 
C) Customer lists 
D) Motion picture films

Question 4

According to IAS 16, a decrease in the carrying amount of a fixed asset that is identified on an asset's first revaluation should be recorded as:

Accepted Answer

A) an expense on the income statement. 
B) a prior period adjustment to retained earnings. 
C) a credit to Revaluation Surplus. 
D) a debit to Revaluation Surplus. 
A) an expense on the income statement. 
B) a prior period adjustment to retained earnings. 
C) a credit to Revaluation Surplus. 
D) a debit to Revaluation Surplus.

Question 5

The following inventory information was taken from the records of Kleinfeld Inc.:$\begin{array}{ll}
\text { Historical cost } & \$ 12,000 \
\text { Replacement cost } & \$ 7,000 \
\text { Expected selling price } & \$ 9,000 \
\text { Expected selling cost } & \$ 500 \
\text { Normal profit margin } & 50 \% \text { of price }
\end{array}$
-Assume that subsequent to your adjustment the expected selling price increases to $13,000.(All the rest of the facts are the same.) What adjustment to inventory should be made under IAS 2 after this event?

Accepted Answer

A) Inventory should be increased (debited) by $3,500. 
B) Inventory should be increased (debited) by $4,000. 
C) No adjustment should be made to inventory once it is written down. 
D) Inventory should be increased (debited) by $1,000. 
A) Inventory should be increased (debited) by $3,500. 
B) Inventory should be increased (debited) by $4,000. 
C) No adjustment should be made to inventory once it is written down. 
D) Inventory should be increased (debited) by $1,000.

Question 6

The following inventory information was taken from the records of a foreign corporation whose stock is listed on an exchange in the U.S. $\begin{array} { l l } 
\text { Historical cost } & \$ 15,000 \
\text { Replacement cost } & \$ 11,000 \
\text { Expected selling price } & \$ 13,500 \
\text { Expected selling cost } & \$ 800 \
\text { Normal profit margin } & \$ 2,500
\end{array}$ How will income under the U.S.GAAP compare to income the company reported under IFRS after reconciliation?

Accepted Answer

A) Income will not be affected by the reconciliation. 
B) Income under U.S.GAAP will be lower by $1,700. 
C) Income under U.S.GAAP will be lower by $2,500. 
D) Income under U.S.GAAP will be equal to income under IFRS. 
A) Income will not be affected by the reconciliation. 
B) Income under U.S.GAAP will be lower by $1,700. 
C) Income under U.S.GAAP will be lower by $2,500. 
D) Income under U.S.GAAP will be equal to income under IFRS.

Question 7

If a company chooses the revaluation model permitted in IAS 16 for fixed asset measurement:

Accepted Answer

A) annual revaluations must be performed on each class of assets. 
B) it must update the valuation so that the balance sheet represents fair value on the balance sheet date. 
C) appraisals must be performed by an official of the IASB. 
D) the depreciated replacement cost must be used as the fair value of the fixed asset. 
A) annual revaluations must be performed on each class of assets. 
B) it must update the valuation so that the balance sheet represents fair value on the balance sheet date. 
C) appraisals must be performed by an official of the IASB. 
D) the depreciated replacement cost must be used as the fair value of the fixed asset.

Question 8

The following inventory information was taken from the records of Kleinfeld Inc.:$\begin{array}{ll}
\text { Historical cost } & \$ 12,000 \
\text { Replacement cost } & \$ 7,000 \
\text { Expected selling price } & \$ 9,000 \
\text { Expected selling cost } & \$ 500 \
\text { Normal profit margin } & 50 \% \text { of price }
\end{array}$
-Under U.S.GAAP, what should the balance sheet report for Inventory?

Accepted Answer

A) $9,000 
B) $8,500 
C) $7,000 
D) $10,000 
A) $9,000 
B) $8,500 
C) $7,000 
D) $10,000

Question 9

How does IAS 38 (Intangible Assets) differ from U.S.GAAP with respect to development costs?

Accepted Answer

A) U.S.GAAP does not allow capitalization of development costs, whereas IAS 38 allows capitalization of these costs. 
B) U.S.GAAP requires capitalization of development costs, whereas IAS 38 makes capitalization of these costs optional. 
C) U.S.GAAP treats development costs as part of "Goodwill", whereas IAS 38 treats these costs as an intangible asset. 
D) U.S.GAAP requires expensing of all development costs, and IAS 38 requires capitalizing all development costs. 
A) U.S.GAAP does not allow capitalization of development costs, whereas IAS 38 allows capitalization of these costs. 
B) U.S.GAAP requires capitalization of development costs, whereas IAS 38 makes capitalization of these costs optional. 
C) U.S.GAAP treats development costs as part of "Goodwill", whereas IAS 38 treats these costs as an intangible asset. 
D) U.S.GAAP requires expensing of all development costs, and IAS 38 requires capitalizing all development costs.

Question 10

What is one major difference between IFRS and U.S.GAAP relative to correction of errors?

Accepted Answer

A) U.S.GAAP is silent as to how to treat errors that have been discovered. 
B) IFRS is silent as to how to treat errors that have been discovered. 
C) Under U.S.GAAP, a prospective approach is taken. 
D) Under IFRS, if it's impractical to restate financial statements, then no restatement is necessary. 
A) U.S.GAAP is silent as to how to treat errors that have been discovered. 
B) IFRS is silent as to how to treat errors that have been discovered. 
C) Under U.S.GAAP, a prospective approach is taken. 
D) Under IFRS, if it's impractical to restate financial statements, then no restatement is necessary.

Question 11

What should be the basis for choosing depreciation methods for fixed assets under IAS 16 (Property, Plant, and Equipment)?

Accepted Answer

A) Tax minimization 
B) Profit maximization 
C) Useful life of the fixed asset 
D) Pattern of economic benefits to be derived from the asset 
A) Tax minimization 
B) Profit maximization 
C) Useful life of the fixed asset 
D) Pattern of economic benefits to be derived from the asset

Question 12

In what way does the IASB standard on leases (IAS 17) differ from U.S.GAAP?

Accepted Answer

A) It is less specific than U.S.GAAP in terms of defining what constitutes a finance lease. 
B) U.S.GAAP requires more professional judgment in accounting for leases than does IAS 17. 
C) IAS 17 is more specific than U.S.GAAP in defining an operating lease. 
D) Operating leases are capitalized under IAS 17 but are not capitalized under U.S.GAAP. 
A) It is less specific than U.S.GAAP in terms of defining what constitutes a finance lease. 
B) U.S.GAAP requires more professional judgment in accounting for leases than does IAS 17. 
C) IAS 17 is more specific than U.S.GAAP in defining an operating lease. 
D) Operating leases are capitalized under IAS 17 but are not capitalized under U.S.GAAP.

Question 13

What types of differences can cause issues between International Financial Reporting Standards and U.S.GAAP?

Accepted Answer

A) Measurement 
B) Alternatives available 
C) Disclosure 
D) All of the above may be different between IFRS and U.S.GAAP. 
A) Measurement 
B) Alternatives available 
C) Disclosure 
D) All of the above may be different between IFRS and U.S.GAAP.

Question 14

Under a joint exposure draft issued by the IASB and FASB in 2010, what is one of the most significant proposals?

Accepted Answer

A) IFRS and U.S.GAAP would have identical quantifiable criteria for lease classification. 
B) Leases would no longer be classified as finance or operating. 
C) Lessors would recognize income immediately at the inception of the lease. 
D) There would be no lease disclosure required in the notes to the financial statements. 
A) IFRS and U.S.GAAP would have identical quantifiable criteria for lease classification. 
B) Leases would no longer be classified as finance or operating. 
C) Lessors would recognize income immediately at the inception of the lease. 
D) There would be no lease disclosure required in the notes to the financial statements.

How does the definition of asset impairment differ between IAS 36 and U.S.GAAP?

Under IAS 38, which of the following items is specifically EXCLUDED from being recognized as an internally generated intangible asset?

According to IAS 16, a decrease in the carrying amount of a fixed asset that is identified on an asset's first revaluation should be recorded as:

If a company chooses the revaluation model permitted in IAS 16 for fixed asset measurement:

The following inventory information was taken from the records of Kleinfeld Inc.: Historical cost \ 12,000 Replacement cost \ 7,000 Expected selling price \ 9,000 Expected selling cost \ 500 Normal profit margin 50\% of price -Under U.S.GAAP, what should the balance sheet report for Inventory?

How does IAS 38 (Intangible Assets) differ from U.S.GAAP with respect to development costs?

What is one major difference between IFRS and U.S.GAAP relative to correction of errors?

What should be the basis for choosing depreciation methods for fixed assets under IAS 16 (Property, Plant, and Equipment)?

In what way does the IASB standard on leases (IAS 17) differ from U.S.GAAP?

What types of differences can cause issues between International Financial Reporting Standards and U.S.GAAP?

Under a joint exposure draft issued by the IASB and FASB in 2010, what is one of the most significant proposals?

Introduction to International Accounting

Worldwide Accounting Diversity

International Convergence of Financial Reporting

International Financial Reporting Standards: Part II

Comparative Accounting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Additional Financial Reporting Issues

Analysis of Foreign Financial Statements

International Taxation

International Transfer Pricing

Strategic Accounting Issues in Multinational Corporations

Comparative International Auditing and Corporate Governance

International Corporate Social Reporting

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Exam 4: International Financial Reporting Standards: Part I

How does the definition of asset impairment differ between IAS 36 and U.S.GAAP?

Under IAS 38, which of the following items is specifically EXCLUDED from being recognized as an internally generated intangible asset?

According to IAS 16, a decrease in the carrying amount of a fixed asset that is identified on an asset's first revaluation should be recorded as:

If a company chooses the revaluation model permitted in IAS 16 for fixed asset measurement:

The following inventory information was taken from the records of Kleinfeld Inc.: Historical cost \ 12,000 Replacement cost \ 7,000 Expected selling price \ 9,000 Expected selling cost \ 500 Normal profit margin 50\% of price -Under U.S.GAAP, what should the balance sheet report for Inventory?

How does IAS 38 (Intangible Assets) differ from U.S.GAAP with respect to development costs?

What is one major difference between IFRS and U.S.GAAP relative to correction of errors?

What should be the basis for choosing depreciation methods for fixed assets under IAS 16 (Property, Plant, and Equipment)?

In what way does the IASB standard on leases (IAS 17) differ from U.S.GAAP?

What types of differences can cause issues between International Financial Reporting Standards and U.S.GAAP?

Under a joint exposure draft issued by the IASB and FASB in 2010, what is one of the most significant proposals?

Introduction to International Accounting

Worldwide Accounting Diversity

International Convergence of Financial Reporting

International Financial Reporting Standards: Part II

Comparative Accounting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Additional Financial Reporting Issues

Analysis of Foreign Financial Statements

International Taxation

International Transfer Pricing

Strategic Accounting Issues in Multinational Corporations

Comparative International Auditing and Corporate Governance

International Corporate Social Reporting

Filters