The IASB and FASB Are Working on Several Joint Projects

question 43

Multiple Choice

The IASB and FASB are working on several joint projects.What is the purpose of the Business Combinations Project?

• A)to provide guidance on the application of the purchase method.
• B)to enhance the usefulness of information in assessing the financial performance of the reporting enterprise.
• C)to develop a common comprehensive standard on revenue recognition.
• D)to develop a common conceptual framework that both boards can use as a basis of futures standards.
• E)to allow pooling of interests accounting.

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Definitions:

Straight-Line Depreciation

A method for dispersing the expense of a physical asset over its viable life in regular yearly sums.

Cash Flow

The total amount of money being transferred into and out of a business, particularly in terms of liquidity and financial stability.

Capital Budgeting

The process businesses use to evaluate and select long-term investments, such as new machinery, replacement machinery, new plants, new products, and research development projects.

Straight-Line Depreciation

A method of calculating the depreciation of an asset, dividing its cost by the number of years it is expected to be useful.