Which One of the Following Describes a Difference in How

question 40

Multiple Choice

Which one of the following describes a difference in how the equity method is applied under GAAP than under IFRS?

• A) the equity method is generally applied to limited partnerships under IFRS for investments of more than 3 to 5%, whereas GAAP adopts a "significant influence" principle.
• B) IFRS requires uniform accounting policies, whereas GAAP does not.
• C) significant influence is presumed if the investor has 20% or more of the voting rights in a corporate investee under GAAP, whereas IFRS adopts a "facts and circumstances" approach that looks beyond the voting rights percentage.
• D) GAAP requires consideration of potential voting rights on currently exercisable of convertible instruments, whereas IFRS does not.

---

Definitions:

Wrong Words

Wrong Words describes instances where inappropriate, incorrect, or unintended words are used in communication.

Speaking Fluently

The ability to express oneself easily and articulately in spoken language.

Gray Matter

The darker colored regions of the brain and spinal cord, primarily composed of neuron cell bodies and branches.

White Matter

Brain tissue composed of myelinated nerve fibers that transmit signals throughout the brain and to the spinal cord, facilitating communication between different brain regions.