Consider the following questions:
1. How does IFRS differ from U.S. GAAP with respect to using the equity method?
2. What is the effect of a company electing the fair value option with respect to an investment that otherwise would be accounted for using the equity method?
3. Define a financial instrument. Provide three examples of current liabilities that represent financial instruments.
4. Some financial instruments are called derivatives. Why?
If possible, please give examples to better understand your response.