Question

Indicate whether each of the following describes an accounting treatment that is acceptable under IFRS, U.S. GAAP, both, or neither. A company takes out a loan to finance the construction of a building that will be used by the company. The interest on the loan is capitalized as part of the cost of the building. Inventory is reported on the balance sheet using the last-in, first-out (LIFO) cost flow assumption. ,The gain on a sale and leaseback transaction classified as an operating lease is deferred and amortized a over the lease term A company writes a fixed asset down to its recoverable amount and recognizes an impairment loss in amount, and the previously recognized impairment loss is reversed. acquirer recognizes the difference as a gain on purchase of another company. b. U.S. GAAP c, IFRS Year 1. In a subsequent year, the recoverable amount is determined to exceed the assets carrying , A company pays less than the fair value of net assets in the acquisition of another company. The PREGUNTA 18 Indicate whether each of the following describes an accounting treatment that is acceptable under IFRS, U.S. GAAP, both or neither A company enters into an eight-year lease on equipment that is expected to have a useful life of ten years. The lease is accounted for as an operating lease. sheet at fair value rather than as an integral part of the full year. An intangible asset with an active market that was purchased two years ago is carried on the balance a. IFRS b. Neither .Both In preparing interim financial statements, interim periods are treated as discrete reporting periods Research and development costs are capitalized when certain criteria are met. Interest paid on borrowings is classified as an operating activity in the statement of cash flows.

Answer 1

1. Both

2. U.S. GAAP

3. U.S. GAAP

4. IFRS

5. U.S. GAAP

6. Both

7. Neither

8. IFRS

9. Both

10. Both