IFRS Frequently

question 106

Multiple Choice

IFRS frequently

• A)upon issue are automatically approved for any foreign listed company.
• B)permit only one accounting treatment for similar business transactions and events to promote comparability.
• C)allow firms less latitude when compared to U.S.GAAP.
• D)follow a more generalized overview approach than do U.S.GAAP counterpart standards.

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Definitions:

Debt/Equity Ratio

A metric that illustrates the division of financing between debt and equity for a company's assets.

Cost of Equity

The return a firm theoretically pays to its equity investors, i.e., shareholders, to compensate for the risk they undertake by investing their capital.

Cost of Debt

The effective rate that a company pays on its current debt as part of its capital structure.

Debt-Equity Ratio

The financial ratio reflects how shareholders' equity and debt equally contribute to asset financing.