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Flashcards in Ch 11 Appendix + IFRS Insights Deck (19):
0

MACRS Modified Accelerated Cost Recovery System, 3 ways it's computation differs from GAAP?

1 mandated tax life (generally shorter than economic life)

2 cost recovery on accelerated basis

3 assigned salvage value of 0

1

Inter period tax allocation

Different amounts of depreciation for Income tax reporting
and financial GAAP reporting in each year

Are matter of timing and result in temporary differences

2

The definition of property, plant and equipment is..

Essentially the same under GAAP and IFRS

3

Under both GAAP and IFRS, changes in depreciation method and changes in useful life are...

Treated in current and future periods

Prior periods aren't affected

4

Component depreciation IFRS VS. GAAP?

Required under IFRS

GAAP permitted but rarely used

5

Accounting for plant asset disposals IFRS VS. GAAP?

Same under IFRS and GAAP

6

Revaluation model and historical model for property, plant and equipment, IFRS VS. GAAP?

IFRS companies can use historical cost model
Or revaluation model

GAAP companies can't use revaluation model

7

GAAP VS IFRS Natural resources

Accounting for initial costs to acquire natural resources
Is similar under GAAP and IFRS

8

Interest cost incurred during construction GAAP VS. IFRS?

Under both GAAP and IFRS interest costs incurred
During construction must be capitalized

9

Exchanges of nonmonetary assets GAAP VS. IFRS?

Both require that gains on exchange of non-monetary assets
be Recognized if exchange has commercial substance

10

What depreciation methods do IFRS and GAAP permit?

Bth permit straight line, diminishing balance,
units of production

11

How do GAWP and IFRS view depreciation?

Both view depreciation as allocation of cost over
Asset's life

12

Testing for impairment of assets GAAP vs. IFRS

IFRS stricter, but allows reversals of impairment losses

GAAP, as long as future undiscounted cash flows
Exceed carrying amount of asset no impairment's recorded

13

Recoverable amount

Higher of fair value less costs to sell or value in use

14

Fair value les costs to sell

Asset could be sold for after deducting costs of disposal

15

Value in use

Present value of cash flows expected from future use
and eventual sale of asset at end of useful life

16

How often do companies review asset for indicators of impairment?

On annual basis

17

Revaluation surplus

Unrealized gain established in fair value account of
Tangible asset subsequent to acquisition

18

Under no circumstances can the Accumulated Other
Comprehensive Income account related to revaluations...

Have a negative account balance