A Major Difference Between IFRS and GAAP Regarding Valuation of Property

question 21

Multiple Choice

A major difference between IFRS and GAAP regarding valuation of property, plant, and equipment is that

• A)IFRS allow valuation increases to be recorded in certain circumstances, but GAAP does not permit increases
• B)IFRS and GAAP differ greatly on accounting for nonmonetary exchanges
• C)IFRS require capitalization of all repairs and maintenance while GAAP does not
• D)IFRS allocate lump-sum purchase costs based on relative book values rather than relative market values

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Definitions:

Marginal Tax Rate

The percentage of tax applied to your income for each tax bracket in which you qualify.

Progressive Tax

A taxation system where the tax rate increases as the taxable amount rises, thereby imposing a higher percentage rate on those with higher incomes.

Marginal Tax Rate

The rate at which the last dollar of a person’s income is taxed, indicating the impact of an additional dollar of earnings on the amount of taxes paid.

Average Tax Rate

The proportion of total income that is paid in taxes.