How Does IAS 38 (Intangible Assets) Differ from U

question 22

Multiple Choice

How does IAS 38 (Intangible Assets) differ from U.S. GAAP with respect to development costs?

• A) U.S. GAAP does not allow capitalization of development costs, whereas IAS 38 allows capitalization of these costs.
• B) U.S. GAAP requires capitalization of development costs, whereas IAS 38 makes capitalization of these costs optional.
• C) U.S. GAAP treats development costs as part of "Goodwill", whereas IAS 38 treats these costs as an intangible asset.
• D) U.S. GAAP requires expensing of all development costs, and IAS 38 requires capitalizing all development costs.

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Definitions:

Component Percentages

Express each item on a particular financial statement as a percentage of a single base amount.

Income Statement

A financial statement that shows a company's financial performance, including revenues, expenses, and profits over a specified period.

Comparable Companies

A valuation method that involves comparing a company's financial metrics to those of similar companies in the same industry.

Operating Strategies

Plans and actions implemented by a business to support its operational objectives and to enhance competitive advantage.