A US Company Has Many Foreign Subsidiaries and Wants to Convert

question 50

Multiple Choice

A U.S. company has many foreign subsidiaries and wants to convert its consolidated financial statements from U.S. GAAP to IFRS. Which of the following items is not one of the likely accounting issues to resolve for the opening IFRS balance sheet?

• A) Inventory valuation.
• B) Capitalizing development costs.
• C) Classifying deferred taxes as current or noncurrent.
• D) Acquisition value for a subsidiary.
• E) Liability for restructuring charges.

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Definitions:

Activity Level

A measure of the volume of production or operations, often used to plan and control various business activities.

Period Costs

Expenses that are not directly tied to the production of goods and are expensed in the period in which they are incurred.

Average Costs

The cost per unit calculated by dividing the total cost of production by the number of units produced.

Variable Cost

Expenses that change in direct proportion to the amount of goods or services produced.