IFRS, Like U

question 85

Multiple Choice

IFRS, like U.S. GAAP, require the use of the lower of cost or market method to value inventory, however some differences do exist. Which of the following is not one of the differences?

• A) IFRS eliminate the need to use a ceiling in determining market value.
• B) When write-downs occur, IFRS do not specify how the loss must be categorized in the income statement.
• C) IFRS allow the reversal of a previous write-down.
• D) IFRS define market only as replacement value.

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Definitions:

Long-term Debt

Loans and financial obligations lasting more than one year that a company owes to external parties.

Contingent Liability

A potential liability that may become an actual liability in the future.

Warranty Expense

Costs associated with the obligation to repair or replace a product due to defects for a specified period.

Bad Debt Expense

An expense account to record uncollectible receivables.