1. The importance of international accounting is growing. Within financial innovations, risk management is a key area. List three concerns that are critical for effective risk management.
2. Under IFRS, an asset is considered to be impaired when its carrying amount is greater than its:
a) Recoverable amount
b) Value in use
c) Net selling price
d) Undiscounted future cash flows
3. When accounting rules are left up to professional associations rather than being legislated by governmental bodies, what is the likely result?
a) Very general accounting rules are created, as in code law countries.
b) Very detailed rules for practice are created, as in common law countries.
c) Very general accounting rules are created, as in common law countries.
d) Very detailed rules for practice are created, as in code law countries.
4. IFRS are primarily ________-based standards whereas US GAAP is __________-based.
5. What organization replaced the International Accounting Standards Committee?
6. What is the Norwalk Agreement?
7. TRUE or FALSE: US GAAP reconciliation is required in foreign issuer's filings with the SEC.
8. List the types of differences between IFRS and US GAAP.
9. IFRS 1, First-Time Adoption of International Financial Reporting Standards, is the standard that is applied during preparation of a company's first IFRS-based financial statements. IFRS 1 was created to help companies transition to IFRS and provides practical accommodations intended to make first-time adoption cost-effective. It also provides application guidance for addressing difficult conversion topics.
There are six requirements for companies under IFRS 1. Name one.
10. TRUE or FALSE: IFRS does not allow the use of LIFO.