US CMA Part 1 · Chapter 1 · Question 12 of 23
Which measurement approach for property, plant and equipment is available under IFRS but not under US GAAP?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) The revaluation model, carrying assets at fair value less subsequent depreciation and impairment
Explanation
IAS 16 allows an entity to choose either the cost model or the revaluation model for each class of PP&E. US GAAP requires the historical cost model and does not allow upward revaluation. Impairment and depreciation apply under both frameworks.
More External Financial Reporting Decisions MCQs
- Q14Under IFRS, an asset has a carrying amount of $500,000. Its fair value less costs of disposal is $430,000 and its value in use is…
- Q15Fenwick Corp has pretax financial income of $400,000, which includes $20,000 of tax-exempt municipal bond interest. Tax depreciation…
- Q16Which statement correctly describes lessee accounting under IFRS 16 compared with US GAAP (ASC 842)?
- Q17A lessee signs a five-year lease requiring annual payments of $50,000 at the end of each year. The rate implicit in the lease is 6%, and…
- Q18A company faces a lawsuit that it will probably lose. Its lawyers estimate the loss at between $200,000 and $600,000, with no amount in…