One Difference Between IFRS and GAAP in Valuing Inventories Is

question 18

Multiple Choice

One difference between IFRS and GAAP in valuing inventories is that:

• A) IFRS, but not GAAP, allows reversals so that inventories written down under lower-of-cost-or-market can be written back up to the original cost.
• B) GAAP defines market value as replacement cost where IFRS defines market as the selling price.
• C) GAAP strictly adheres to the historical cost concept and does not allow for write-downs of inventory values while IFRS embraces fair value.
• D) IFRS, but not GAAP, requires that inventories be valued at the lower of cost or market.

Identify factors contributing to market risk and their impact on investment portfolios.

Understand and evaluate offers and terms related to saving accounts and financial investments.

Understand the principles of the efficient market hypothesis (EMH) and its implications for stock prices and investors' actions.

Differentiate between moral hazard and other risk-related terms in insurance and finance contexts.

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Definitions:

Variable Costs

Costs that vary directly with the level of production or volume of output.