The major difference between IFRS and GAAP in accounting for inventories is that
A) GAAP prohibits the use of specific identification.
B) IFRS does not require that a physical inventory be taken.
C) GAAP allows the use of the LIFO cost flow assumption.
D) GAAP requires that the LIFO cost flow assumption be used.

Question

Quizplus · Accepted Answer

The major difference between IFRS and GAAP in accounting for inventories is that GAAP allows the use of the LIFO cost flow assumption, while IFRS prohibits its use. Additionally, IFRS requires that inventories be reported at the lower of cost and net realizable value, while GAAP allows for the use of lower of cost or market. However, both IFRS and GAAP require that inventories be valued at cost, which includes all expenses incurred to bring the inventory to its present location and condition.

The Major Difference Between IFRS and GAAP in Accounting for Inventories