Ch 9 Appendix And IFRS Insights Flashcards Preview

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Flashcards in Ch 9 Appendix And IFRS Insights Deck (13):
0

2 benefits of LIFO Retail method

1 tax advantages

2 better matching of costs and revenues

1

2 assumptions made under LIFO Retail?

1 stable prices

2 fluctuating prices

2

Dollar value LIFO retail method, if price level changes the company must...

Eliminate the price change to measure the real increase
Not the dollar increase

3

Similarity IFRS and GAAP account of inventory acquisitions...

at Historical cost + evaluate for lower of cost or market
After acquisition

4

Difference: requirements for accounting for and reporting inventories are more...

Principles based under IFRS

GAAP provides more detailed guidelines for inventory
Accounting

5

What cost flow assumptions do IFRS and GAAP both permit?

FIFO and Average cost

6

GAAP and IFRS: LIFO for inventory valuation?

permitted under GAAP

prohibited under IFRS

7

Similarity: IFRS and GAAP: who owns the goods?

Goods in transit, consigned goods, special sales
agreements, costs to include in inventory accted. The same

8

Which cost flow assumption do IFRS and GAAP set their own standards for?

Specific identification

9

Difference IFRS and GAAP: lower-of-cost-or-market test for inventory valuation

IFRS defines market as net realizable value

GAAP defines market as replacement cost subject to
constraints of net realizable value (ceiling)
And net realizable value - normal markup (floor)

10

Difference IFRS and GAAP: how inventory is written down under the lower-of-cost-or-market valuation

GAAP new basis is its cost, inventory can't be written
Back up to original value

IFRS write downs can be reversed

11

Difference GAAP and IFRS: biological assets and agricultural produce?

IFRS: reported at net realizable value at point of harvest

GAAP: no requirement for accounting for all biological
Assets in same way

12

Net realizable value

Net amount company expects to realize from sale
Of inventory