Because of a Difference Between IFRS and GAAP with Respect

question 106

Multiple Choice

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

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Definitions:

Cause-and-Effect Conclusions

Reasoning that establishes a relationship between actions or events such that one or more are the result of the other or others; a fundamental principle in establishing scientific proof.

Validity

The degree to which a test, tool, or study accurately measures or reflects what it is intended to measure.

Applicability

The relevance or suitability of something for a particular purpose or in a specific context.

Accuracy

The degree to which the result of a measurement, calculation, or specification conforms to the correct value or a standard.