Under Both GAAP and IFRS, If a Company Believes That

question 11

True/False

Under both GAAP and IFRS, if a company believes that a long-term contract will lose money, it must recognize the expected losses immediately, and should not allocate any losses to future periods.

---

Definitions:

Roundworms

A phylum of worms known as Nematoda, characterized by their elongated, cylindrical, and unsegmented bodies.

Pseudocoelom

Body cavity lying between the digestive tract and body wall that is incompletely lined by mesoderm.

Tube-Within-a-Tube

A design characteristic of the body plans of many animals, where the outer tube represents the body wall, and the inner tube represents the alimentary canal or gut.

Flukes

Parasitic flatworms that infect the liver, lungs, and other organs of their hosts, with life cycles involving one or more intermediate hosts.