IFRS Provide Guidance That Differs from GAAP Regarding the Procedures

question 28

Essay

IFRS provide guidance that differs from GAAP regarding the procedures to use in construction contracts' future costs estimates.Discuss how the treatments differ.

---

Definitions:

Budgeted Cost

The estimated or planned amount of money allocated for a particular purpose or period of time.

Direct Materials Cost Variance

A measure that evaluates the difference between the actual costs of direct materials used in production and the standard costs.

Direct Materials Price Variance

Direct materials price variance is the difference between the actual cost of direct materials used in production and the standard cost, indicating how much more or less was spent than expected.

Direct Materials Quantity Variance

The difference between the actual quantity of materials used in production and the standard quantity expected, multiplied by the standard cost per unit.