Exam 11: A: Worldwide Accounting Diversity and International Accounting Standards

A U.S.company has many foreign subsidiaries and is converting its consolidated financial statements from U.S.GAAP to IFRS.Which of the following items is not one of the likely accounting issues to resolve for the conversion?

Which of the following is not a problem caused by diversity in accounting practices across countries?

In the 2012 Financial Staff Report issued by the SEC, what were some of the unresolved issues identified that prevented the SEC from requiring IFRS usage?

What does the IASB's Conceptual Framework for Financial Reporting state as the objective of general purpose financial reporting?

What are recognition differences in financial reporting and what would be an example of a recognition difference between IFRS and U.S.GAAP?

What international organization currently issues IFRS?

The major providers of financing in some countries are stockholders, while other countries predominantly use banks as the main financing source.What difference does it make to accounting disclosures in comparing a company from one of each of those countries?

All of the following are simplified principles for recognizing and measuring assets, liabilities, income, and expenses for SMEs under IFRS except:

A company is preparing financial statements using IFRS for the first time for the year ended December 31, 2018.The "transition date" for reporting is

What are the four types of authoritative pronouncements that make up the International Financial Reporting Standards (IFRS)?

Which statement is correct as it relates to diverse accounting practices across countries?

Why do countries have their own unique set of financial reporting practices?

Which of the following is not a problem caused by diverse accounting practices across countries?

A foreign subsidiary of a U.S.-based company has been notified of a loss contingency with an estimated cost ranging between $220,000 and $250,000 which is probable of resulting in an actual loss. Each dollar amount within this range of cost is equally likely of being the actual outcome. -According to IFRS, what is the amount recognized as a provision for loss contingency?

Of the following IFRS, which was the most recently issued?

Which of the following is not a likely step to furthering convergence of FASB and IFRS?

Which of the following is not a step in preparing IFRS financial statements for the first time?

Principal Company is a U.S.-based company that prepares its consolidated financial statements in accordance with U.S.GAAP.Principal reported net income of $ 2,600,000 in 2018 and stockholders' equity of $12,000,000 at December 31, 2018.Principal wants to determine the reporting impact of switching to IFRS.The following three items would create differences in financial reporting: 1) At December 31, 2018, management had determined that a contingent liability was reasonably possible with regard to a defective product and Principal disclosed an amount of $80,000 for this possibility.However, under IFRS, the likelihood of occurrence of an outflow of resources to settle the liability was considered probable.(Ignore income tax.) 2) Principal acquired a building at the beginning of 2016 at a cost of $5,000,000.The building has an estimated useful life of 20 years, an estimated residual value of $1,000,000, and is being depreciated on a straight-line basis.On January 1, 2018, the building has a fair value of $5,500,000.There is no change in the estimated useful life or residual value.In a switch to IFRS, Principal would use the revaluation model in IAS 16 to determine the carrying value of property, plant, and equipment subsequent to acquisition. 3) In 2018, Principal incurred $800,000 of research and development for a new product, of which 35% relates to development activities subsequent to the point at which criteria indicating the creation of an intangible asset had been met.As of the end of 2018, development of the new product had not been completed. Required: 1) Prepare a schedule reconciling net income under U.S.GAAP to net income under IFRS for the year ended December 31, 2018. 2) Prepare a schedule reconciling stockholders' equity under U.S.GAAP to stockholders' equity under IFRS at December 31, 2018.

The most recent FASB-IASB convergence projects include:

What are the steps to be taken in preparing IFRS financial statements for the first time?