Which of the following is a difference between IAS 37 and U.S. GAAP with respect to restructuring provisions?
A) U.S. GAAP does not allow recognition of a restructuring provision until a liability has been incurred.
B) There is no difference between IAS 37 and U.S. GAAP with respect to restructuring provisions.
C) IAS 37 does not allow recognition of a restructuring provision until a liability has been incurred.
D) A restructuring provision and related loss is more likely to occur later under IAS 37 than under U.S. GAAP.

Question

Quizplus · Accepted Answer

Under U.S. GAAP, a restructuring provision cannot be recognized until a liability has been incurred, whereas under IAS 37 a provision can be recognized before a liability has been incurred if certain criteria are met. Therefore, there is a difference between the two standards with respect to recognition of restructuring provisions. Option B is incorrect as it states there is no difference between the two standards, which is not true. Option C is incorrect as it misrepresents IAS 37 as not allowing recognition of a restructuring provision until a liability has been incurred. Option D is irrelevant to the question as it does not relate to the differences between the two standards regarding restructuring provisions.

Which of the Following Is a Difference Between IAS 37