International Financial Reporting Standards Call for Companies to Mark the Recorded

question 224

Multiple Choice

International Financial Reporting Standards call for companies to mark the recorded values of certain types of assets and liabilities to fair value each period. These unrealized gains and losses are excluded from net income but included in comprehensive income and include all of the following except

• A) adjustments to pension plan assets.
• B) gains from foreign currency translation.
• C) unrealized losses on certain types of investments.
• D) adjustment to fixed assets for depreciation.

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Definitions:

Pooling of Interest Method

An accounting method used in mergers and acquisitions, where the combined assets and liabilities of the merging entities are recorded at their historical costs.

GAAP

Generally Accepted Accounting Principles; a collection of commonly-followed accounting rules and standards for financial reporting.

Business Combinations

Transactions in which one entity gains control over another and they are combined into one entity, often involving mergers, acquisitions, or consolidations.

Voting Common Stock

Shares in a company that grant the holder the right to vote on corporate matters, such as electing the board of directors.