Which of the Following Is a Major Difference Between IFRS

question 45

Multiple Choice

Which of the following is a major difference between IFRS and GAAP regarding valuation of property, plant, and equipment?

• A) IFRS allow valuation increases to be recorded in certain circumstances, but GAAP does not permit increases.
• B) IFRS and GAAP differ greatly on recognition of gains and losses from nonmonetary exchanges.
• C) IFRS require capitalization of all repairs and maintenance while GAAP does not.
• D) IFRS allocate lump-sum purchase costs based on relative book values rather than relative market values.

---

Definitions:

Liability

A financial obligation or debt that a company owes, which will need to be paid to creditors, suppliers, or other parties.

Consolidated Balance Sheet

A financial statement that presents the assets, liabilities, and shareholders' equity of a parent company and its subsidiaries as one entity.

Net Assets

The total assets of a company or organization minus its total liabilities, reflecting the entity's own equity value.

Acquisition

The process by which one company takes over controlling interest or assets of another company.