International Final

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International Final
2013-04-28 21:33:33

International Final
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  1. True or False.  
    US GAAP requires entities to report a third balance sheet when there is a retrospective application of something that materially affects the third year balance sheet.
  2. True or False.  
    IFRS allows the agreement to waive a current debt obligation to a non-current debt obligation if the agreement was presented after the balance sheet date but before the financial statements were issued.
  3. ASU 2013-02 states that an entity is required to present either parenthetically on the face of the financial statements or in the notes, significant amounts reclassified from each _________________ of accumulated  other comprehensive income and the income statement ________________ affected by the reclassification
    • 1) Component
    • 2) Line Items
  4. The two core principles the IASB and FASB wish to emphasis in their proposals to the financial statement presentation project are__________________ and _________________.
    • 1) Cohesiveness
    • 2) Disaggregation
  5. True or False
    FASB and IASB are both working on their own individual projects to improve disclosures.
  6. True or False
    Both GAAP and IFRS are required to disclose accounting policies and estimates.
  7. True or False
    Disclosures for Contingencies are completely converged between GAAP and IFRS.
  8. Where are discontinued operations reported under both US GAAP and IFRS?
    Income statment
  9. Briefly describe the three inputs in the fair value hierarchy:
    Level 1
    Level 2
    Level 3
    • A level 1 input is a quoted price in an active market for identical assets.
    • A level 2 input is an input other than quoted prices in level 1 that are observable.  It could be quoted prices for similar assets in active markets or quoted prices for identical or similar assets in inactive markets.
    • A level 3 input is unobservable.
  10. True or False
    There are no restrictions on when a level 1 input can be adjusted, but if adjusted the input must be reduced to a level 2 input and the adjustment must be disclosed.
  11. Which of the following is not true regarding fair value measurements?
    a. The highest and best use of an asset or liability must be considered.
    b. If a principle market is not available, fair value cannot be used.
    c. The assumptions used in fair value measurements must be the assumptions that market participants would use.
    d. Transactions should be orderly to be used in a price estimate.
  12. Under IFRS, prior-service amortization costs are:
    a. Recognized in OCI then amortized over the remaining service life
    b. Vested benefits are amortized; unvested benefits are immediately expensed
    c. Recognized immediately and expensed through the income statement
    d. Amortized over time or recognized immediately – either option is acceptable
  13. Under which set of standards can pension cost be capitalized (such as through inventory)?
    a. GAAP
    b. IFRS
    c. Neither GAAP nor IFRS permit capitalization of pension cost under any circumstanced.
    d. Both GAAP and IFRS permit capitalization of pension cost under appropriate circumstances
  14. True or False
    Under IFRS, an entity does not have to disclose in the notes to the financial statements the line items where pension cost is recorded.
  15. True or False
    Under IFRS a company can choose to use either the Cost Model or Revaluation Model of depreciation for a class of assets.
  16. Under IFRS, for each asset class, which of the following DOES NOT need to be reviewed for appropriateness each year?
    a. Depreciation Method
    b. Asset Classification
    c. Salvage Valued.
    d. Estimated Useful Life
  17. True or False
    There are currently no standards for investment property under GAAP; however, the FASB has issued an exposure draft regarding investment property.
  18. When accounting for income taxes, what is recognized for the estimated future tax effects of temporary differences and for carried forward tax losses and credits?
    a. Income tax expense
    b. Current tax
    c. Deferred taxed.
    d. Income tax payable
  19. Under IFRS accounting, all deferred taxes are classified on the balance sheet as:
    a. Current
    b. Non-current
    c. Current or non-current based on the nature of the related asset
    d. None of the above
  20. True or False
    IFRS accounting provides no specific guidance regarding estimating uncertain tax positions, but it does allow the use of the U.S. GAAP cumulative-probability approach.
  21. Which of the following is false concerning the revaluation model used for the recognition of intangible assets?
    a. Increases and decreases in revaluation are recognized in Other Comprehensive Income.
    b. Revaluation is used only when an active market exists.
    c. Revaluation is used by both GAAP and IFRS under certain conditions.
    d. The revaluation method uses the fair value of an intangible asset at the revaluation date.
  22. Under IFRS, list three of the six criteria required for development to be capitalized.
    • Future economic benefit
    • Feasible to complete project
    • Ability to sell
    • Intention to complete
    • Reliable
    • Availability of adequate resources to complete the development and to use or sell it
  23. US GAAP allows the reversal of impairment losses on intangible assets.
    False, only IFRS allows the reversal of impairment losses
  24. What does the classification of a lease depend on under both US GAAP and IFRS
    • US GAAP - form of the contract
    • IFRS - substance of the transaction
  25. What are major concerns about the initial exposure draft for leases?
    • Measurement provisions for complex leases
    • Too subjective, difficult to estimate
    • More guidance is needed on multiple-element contracts
    • Cost/benefit of accelerated expense recognition
    • Hybrid accounting model for lessors
  26. When are leases classified under current IFRS, US GAAP, initial exposure draft, and the proposed changes to the exposure draft?
    • IFRS, US GAAP, and initial exposure draft: leases are classified at the inception of the lease
    • Proposed changes to the exposure draft: at their commencement
  27. Which inventory costing method is not allowed under IFRS?
  28. True or False
    Inventory write-down allows companies to recognize losses in the period that they occur.
  29. True or False
    Reversal of inventory write-down is allowed under US GAAP.
  30. Which best describes the convergence project on Business Combinations?
    a. It was completed and the FASB and the IASB now have identical standards for business combinations.
    b. It was completed, however, differences between the FASB and the IASB standards exist.
    c. It was abandoned after some progress was made.
    d. There never has been a convergence project on Business Combinations.
  31. What are the significant differences between the FASB and the IASB standards on Business Combinations?
    a. There are not differences.
    b. Goodwill impairment.
    c.  Goodwill impairment and contingent assets and liabilities.
    d. Goodwill impairment, contingent assets and liabilities, and the pooling-of-interests method.
  32. True or False
    When testing for goodwill impairment, a US company following US GAAP would first test to see if the fair value of a reporting unit is below its carrying amount (or book value) and if it is move onto the two-step impairment test. A company following IFRS would test to see if the recoverable amount of a CGU (cash generating unit) is below its carrying amount and if it is immediately recognize the impairment loss.
  33. Which of the following is NOT a characteristic of global accounting standards?
    a. Rules-based
    b. Principle-based
  34. True or False
    In 2008, the IASB and FASB added the conceptual framework project to the active agenda.
    False, 2004
  35. True or False
    The conceptual framework project was divided into eight phases.
  36. True or False
    The first exposure draft issued by the FASB in May 2010 on Financial Instruments was very well received.
  37. Financial Instruments are one of the FASB’s and IASB’s original “Big 3.”
  38. Which of the following are true?   
    I. The recently issued exposure drafts from the FASB and IASB on Financial Instruments   are 100% converged.
    II. Credit Risks are related to the impairment of financial instruments.
    III. There is no effective date for the most recent FASB exposure draft for financial instruments. 
    a. I & II
    b. I & III
    c. I, II, III
    d. II & III
  39. True or False
    One of the most significant differences between U.S. GAAP and IFRS in regards to revenue recognition is that IFRS contains many industry specific guidelines and standards.
  40. According to current U.S. GAAP standards, which one of the following statements is not required in order for revenue to be realized or realizable and earned.
    a. The seller’s price to the buyer is fixed or determinable
    b. Collectability is reasonably assured
    c. Consideration has been received by the sellerd.
    d. Delivery has occurred or services have been renderede.      
    e. Persuasive evidence of an arrangement exists
  41. According to one study, ______ _______  has been the largest single source of public-company restatements over the past decade.
    Revenue Recognition
  42. Which of the following is not a criterion to be classified as an asset held for sale?
    a. The entity currently has the intention and ability to transfer the asset to a buyer in a future condition.
    b. Management, with relevant authority, commits to a plan to sell the asset at a reasonable price.
    c. An active program to locate a buyer has commenced.
    d. It’s probable that the sale will qualify for recognition within one year.
    A, future should say current
  43. How are discontinued operations measured?
    a. Carrying value
    b. Fair value less costs to sell
    c. Lower of their carrying value or fair value
    d. Lower of their carrying value or fair value less costs to sell