Although IFRS Require the Use of the Lower of Cost

question 1

Multiple Choice

Although IFRS require the use of the lower of cost or market method to value inventory, some differences from GAAP still exist.Which of the following is not one of the differences?

• A)Market is defined only as net realizable value in IFRS.
• B)When write-downs occur, IFRS do not specify how the loss must be categorized in the income statement.
• C)IFRS allow the reversal of a previous write-down.
• D)IFRS define market only as replacement cost.

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Definitions:

Non Est Factum

A legal defense claiming that a contract is invalid because the signer was unaware of its nature due to an honest mistake.

Functionally Illiterate

The condition of having limited reading and writing skills that are insufficient for everyday needs.

Mistake of Fact

A misunderstanding or incorrect belief regarding a fact that is material to a contract at the time of its formation, potentially rendering the contract voidable.

Non Est Factum

A legal defense in contract law where a person asserts they were mistaken about the fundamental nature of a contract they signed, rendering it void.