Because of a difference between IFRS and GAAP with respect to the classification of an instrument as a financial liability or as equity, certain instruments classified as liabilities under IFRS may be, under GAAP,
A)not disclosed at all
B)classified as other comprehensive income
C)classified as equity
D)may be classified as assets

Question

Quizplus · Accepted Answer

Under GAAP, certain instruments that are classified as liabilities under IFRS may be classified as equity. This is due to a difference in the criteria used to classify an instrument as a financial liability or as equity under the two standards. Therefore, choice C is correct - certain instruments may be classified as equity under GAAP.

Because of a Difference Between IFRS and GAAP with Respect