Question 1

Explain the meaning of the terms contingent liabilities and provisions as they relate to U.S.GAAP and IFRS?

Accepted Answer

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Question 2

Which of the following statements is false regarding the reasons for differing accounting systems around the world?

Accepted Answer

Canada was not a former British colony; it was a part of the British Empire but was not colonized in the same way that other territories were. Mexico was a colony of Spain, not Britain, so its accounting roots cannot be traced to the United Kingdom.

Question 3

When did the SEC drop its longstanding rule that required foreign companies that filed financial statements with it to adjust those statements to conform with U.S.GAAP and allow them to use IFRS?

Accepted Answer

In 2007, the SEC dropped its longstanding rule that required foreign companies to adjust their financial statements to conform with U.S. GAAP, allowing them instead to use International Financial Reporting Standards (IFRS).

Question 4

The cost of Fulton's inventory at the end of the year was $145,000.Due to obsolescence,the cost to replace the inventory was only $90,000.Net realizable value-what the inventory could be sold for-is $102,000.?
Required
Determine the amount Fulton should report on its year-end balance sheet for inventory assuming the company follows (a)U.S.GAAP and (b)IFRS.

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Question 5

In which of the following countries do significant differences exist between accounting income and taxable income?

Accepted Answer

Significant differences exist between accounting income and taxable income in the United States due to the complex tax laws and regulations. Companies may use various accounting methods and make different adjustments to their income for tax purposes, leading to differences between accounting income and taxable income.

Question 6

Explain the two primary legal systems used around the world and what these differences have to do with accounting standards.

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Question 7

How does the application of the lower-of-cost-or-market rule differ between U.S.GAAP and IFRS?

Accepted Answer

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Question 8

Which of the following statements is true regarding the treatment of leases on the financial statements?

Accepted Answer

Under IFRS, the criteria for lease capitalization are principles-based and considered more like guidelines, allowing for more judgment compared to the rules-based approach of U.S. GAAP.

Question 9

Which of the following statements regarding inflation and accounting is false?

Accepted Answer

The SEC does not require U.S. companies to present supplemental financial information adjusted for the effects of inflation. This is a common misconception. The FASB (Financial Accounting Standards Board) has discussed inflation accounting in the past, but there is no current requirement for U.S. companies to adjust their financial statements for inflation.

Question 10

Which of the following statements is false regarding U.S.GAAP versus IFRS financial statement presentation?

Accepted Answer

This statement is false. U.S.GAAP requires a company to report the best estimate within the range of outcomes for a loss contingency, not just the high end of the range.

Question 11

Explain some of the differences in accounting for operating assets that exist between U.S.GAAP and IFRS.

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Question 12

Summarize some of the common differences between U.S.GAAP and IFRS.

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Question 13

Discuss at least four reasons that accounting standards currently differ between countries.

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Question 14

How would you describe the current role of the IASB in setting accounting standards?

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Quiz 14: International Financial Reporting Standards