Which of the Following Statements Is Correct with Regards to IFRS

question 54

Multiple Choice

Which of the following statements is correct with regards to IFRS and U.S.GAAP?

• A)Under U.S.GAAP, all potential liabilities related to uncertain tax positions must be recognized.
• B)The tax effects related to certain items are reported under U.S.GAAP; under IFRS the tax effects are charged or credited to income.
• C)IFRS uses an affirmative judgment approach for deferred tax assets, whereas U.S.GAAP uses an impairment approach for deferred tax assets.
• D)IFRS classifies deferred taxes based on classification of the asset or liability to which it relates.

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Definitions:

Variable Overhead Rate

Variable Overhead Rate is the portion of indirect manufacturing costs that varies in proportion to production volume or activity levels, such as utilities or raw materials.

Actual Production

The real quantity of goods or services produced during a specific period, as opposed to planned or projected quantities.

Fixed Factory Overhead Volume Variance

The difference between the budgeted and actual fixed overhead costs attributed to a variation in produced or achieved volumes of goods.

Actual Hours

The real number of hours worked by employees, often used in comparing to budgeted or standard hours for performance analysis.