Please read the IFRS Self-Test Questions on page 282 and
the International Reporting Case on pages 283 and 284 and answer the
questions required. Take one question at a time and answer it. Let the
remainder of the class answer another question and then comment on the
answers given, expressing why the answer was either correct or not
correct and why.
Which of the following statements about IFRS and GAAP accounting and reporting requirements for the balance sheet is not correct? (a) Both IFRS and GAAP distinguish between current and non-current assets and liabilities. (b) The presentation formats required by IFRS and GAAP for the balance sheet are similar.
(c) Both IFRS and GAAP require that comparative information be reported. (d) One difference between the reporting requirements under IFRS and those of the GAAP balance
sheet is that an IFRS balance sheet may list long-term assets first. 2. Current assets under IFRS are listed generally:
(a) byimportance. (b) in the reverse order of their expected conversion to cash. (c) by longevity. (d) alphabetically.
3. Companies that use IFRS: (a) may report all their assets on the statement of financial position at fair value. (b) are not allowed to net assets (assets 2 liabilities) on their statement of financial positions. (c) may report non-current assets before current assets on the statement of financial position. (d) do not have any guidelines as to what should be reported on the statement of financial position.
4. Franco Company uses IFRS and owns property, plant, and equipment with a historical cost of $5,000,000. At December 31, 2013, the company reported a valuation reserve of $690,000. At Decem- ber 31, 2014, the property, plant, and equipment was appraised at $5,325,000. The valuation reserve will show what balance at December 31, 2014?
(a) $365,000. (b) $325,000. (c) $690,000. (d) $0.
5. A company has purchased a tract of land and expects to build a production plant on the land in ap- proximately 5 years. During the 5 years before construction, the land will be idle. Under IFRS, the land should be reported as: (a) landexpense.
(b) property, plant, and equipment. (c) an intangible asset. (d) a long-term investment