ACCT 1209 Lecture Notes - Lecture 18: International Financial Reporting Standards, Financial Statement, Income Statement

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cerisegiraffe538

2 Mar 2016

School

Northeastern University

Department

Accounting

Course

ACCT 1209

Professor

O' Kelly( G)

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Document Summary

Acct 1209 lecture 18 international perspective; financial statement effects of. While u. s. gaap allows companies to choose between fifo, lifo, and average cost inventory accounting methods, international financial reporting standards (ifrs) currently prohibit the use of lifo. U. s. gaap also allows different inventory accounting methods to be used for different types of inventory items and even for the same item in different locations. Ifrs requires that the same method be used for all inventory items that have a similar nature and use. These differences can create comparability problems when one attempts to compare companies across international borders. For example, general motors and ford use lifo to value u. s. inventories and average cost or fifo for non u. s. inventories, while honda (of japan) uses fifo for all inventories. Financial statement effects of inventory costing methods. Managers prefer to report higher earnings for their companies. Managers prefer to pay the least amount of taxes allowed by law as late as possible.

Related Questions

1. International Financial Reporting Standards (IFRS) could be used by a country by:A) adopt IFRS as its national GAAPB) allow listed domestic companies to use IFRSsC) require or allow foreign companies listed on national stock exchanges to use IFRSsD) require listed domestic companies to use IFRS in the preparation of the consolidated financial statementsE) all of the above

2. The agreement between the FASB and the IASB to make everyeffort to ensure that financial reporting standards are fullycompatible and to ensure compatibility is maintained in thefollowing document:

A) Business Combination Project (Business CombinationsProject)

B) Convergence Framework Project

C) Conceptual Research Project (Conceptual Research Project)

D) Norwalk Agreement (Norwalk Agreement)

E) Companies Act

3. There are differences between IFRS and US GAAP. The use of the lower-of-cost-or-market rule for valuing inventory and the difference in market interpretation is an example of:A) time differencesB) differences of disclosureC) recognition differencesD) differences in presentationE) measurement differences

4. Differences between IFRS and US GAAP in R & D are anexample of:

A) time differences

B) differences of disclosure

C) recognition differences

D) differences in presentation

E) measurement differences

5. Which of the following statements is believed to be trueabout the accounting convergence of those proposingconvergence?

A) Convergence would reduce feelings of nationalism.

B) Convergence is desirable because there is little differencebetween capital markets in different countries.

C) Convergence would help raise the quality of internationalaccounting practice.

D) None of the above statements is true.

6. Which of the following is considered the most importantimpediment to accounting convergence?

A) Nationalism

B) Lack of accounting knowledge

C) Language differences

D) High cost of convergence

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ACCT 1209 Lecture Notes - Lecture 18: International Financial Reporting Standards, Financial Statement, Income Statement

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