Ch 4 IFRS Insights

Question 0

5 differences of IFRS Income statement

Answer 0

1 IFRS doesn’t mention a single or multiple step approach
And bans extraordinary items

2 under IFRS companies must classify expenses by nature
Or function

3 IFRS identifies minimum information requirements for
Income statement

4 IFRS doesn’t define key measures like income from
operations

5 under IFRS Revaluation of property, plant, equipment
And intangible assets is permitted and reported as
Other comprehensive income

Question 1

3 Similarities btw income statement of GAAP and IFRS?

Answer 1

1 indicate amount of net income attributable to
Noncontrolling interest

2 same presentation guidelines for discontinued operations

3 both have items that are recognized in equity as
comprehensive income but don’t affect net income

Question 2

Nature of expense method

Answer 2

Simple to apply because allocation of expense to

Different functions aren’t necessary

Question 3

Function of expense method

Answer 3

Identifies major cost drivers of company
And helps users assess whether these amounts are
Appropriate for revenue generated