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Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339 Exercise 2
Comparing U.S. GAAP to IFRS
Winged Wheel Garage, Inc., purchased a parcel of land on January 3, 2012, for $50,000. Its market value at the end of 2012 was $55,000.
Requirements
1. Using the U.S. GAAP cost principle, at what value would the land be reported on the balance sheet as of January 3, 2012 What value would the land be reported at on the December 31, 2012, balance sheet
2. Using IFRS, at what value would the land be reported on the balance sheet as of January 3, 2012 What value would the land be reported at on the December 31, 2012, balance sheet
Winged Wheel Garage, Inc., purchased a parcel of land on January 3, 2012, for $50,000. Its market value at the end of 2012 was $55,000.
Requirements
1. Using the U.S. GAAP cost principle, at what value would the land be reported on the balance sheet as of January 3, 2012 What value would the land be reported at on the December 31, 2012, balance sheet
2. Using IFRS, at what value would the land be reported on the balance sheet as of January 3, 2012 What value would the land be reported at on the December 31, 2012, balance sheet
Explanation
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2. The IFRS are accounting guidelines that govern how accountants measure, process, and communicate financial information.
Step 1 Read the exercise.
Step 2 Using the IFRS determine on the balance sheet as of January 3, 2012 and on December 31, 2012.
The IFRS is less specific and based on general principles thus it could be shown on the balance sheet at January 3, 2012 at $50,000. On the December 31, 2012 balance sheet, the land would be reported at $50,000.
Step 1 Read the exercise.
Step 2 Using the IFRS determine on the balance sheet as of January 3, 2012 and on December 31, 2012.
The IFRS is less specific and based on general principles thus it could be shown on the balance sheet at January 3, 2012 at $50,000. On the December 31, 2012 balance sheet, the land would be reported at $50,000.
Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
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