.

Marigold Corp. issued 8600, 5-year convertible bonds of $2,000 each for $4450000 at the beginning of 2018. The bonds have a stated rate of interest of 8% and interest is payable annually. Each bond can be convertible into 100 shares with a par value of $10. The market rate of similar nonconvertible debt is 9%. Determine the fair value of the equity component using the "with-and-without" method is: $1385733 $2892055 $ 173212 $4276788

$ 173212

Mars, Inc. follows IFRS for its external financial reporting, while Jerome Company uses GAAP for its external financial reporting. During the year ended December 31, 2018, both companies changed from using the completed-contract method of revenue recognition for long-term construction contracts to the percentage-of-completion method. Both companies experienced an indirect effect, related to increased profit-sharing payments in 2018, of $30,000. As a result of this change, how much expense related to the profit-sharing payment must be recognized by each company on the income statement for the year ended December 31, 2018? Mars, Inc. Jerome Company $30,000 $30,000 $-0- $-0- $30,000 $-0- $-0- $30,000 .

$-0- $30,000 .

Alice, Inc. has the following deferred tax assets at December 31, 2017: Amount Related to $180,000 Rent revenue collected in advance related to 2018 $75,000 Warranty liability, expected to be paid in 2018 $255,000 Accrued liability related to a lawsuit expected to settle in 2021 What amount would Alice, Inc. report as a current deferred tax asset under IFRS and under GAAP? IFRS U.S. GAAP $255,000 $510,000 $510,000 $255,000 $510,000 $510,000 $0 $255,000

$0 $255,000

Midland Company follows GAAP for its external financial reporting whereas Bailey Company follows IFRS for its external financial reporting. The remaining service lives of employees at both firms is estimated to be 10 years. The following information is available for each company at December 31, 2018 related to their respective defined-benefit pension plans. Midland Bailey Net of pension assets and liabilities $ 110,000 $ 140,000 Prior service cost $ 220,000 $ 175,000 What is the amount of Pension Asset/Liability recognized by each company in its balance sheet at December 31, 2018? Midland Bailey Entry field with correct answer $110,000 $14,000 $11,000 $14,000 $110,000 $140,000 $11,000 $140,000

$110,000 $140,000

Midland Company follows GAAP for its external financial reporting whereas Bailey Company follows IFRS for its external financial reporting. The remaining service lives of employees at both firms is estimated to be 10 years. The following information is available for each company at December 31, 2018 related to their respective defined-benefit pension plans. Midland Bailey Net of pension assets and liabilities $ 110,000 $ 140,000 Prior service cost created 1/1/15 $ 230,000 $ 175,000 What is the amount of prior service cost recognized by each company in its income statement for the year ended December 31, 2018? Midland Bailey $230,000 $17,500 $230,000 $175,000 $23,000 $17,500 $23,000 $175,000

$23,000 $17,500

Midland Company follows GAAP for its external financial reporting whereas Bailey Company follows IFRS for its external financial reporting. The remaining service lives of employees at both firms is estimated to be 10 years. The following information is available for each company at December 31, 2018 related to their respective defined-benefit pension plans. Midland Bailey Net of pension assets and liabilities $ 110,000 $ 140,000 Prior service cost (after amortization, if any) $ 230,000 $ 175,000 What is the amount of Prior Service Cost recognized by each company on its balance sheet at December 31, 2018? Midland Bailey $-0- $-0- $230,000 $-0- $230,000 $175,000 $-0- $175,000

$230,000 $-0-

Crane Company issued 7000, 4-year convertible bonds of $2000 each for $3500000 at the beginning of 2018. The bonds have a stated rate of interest of 8% and interest is payable annually. Each bond can be convertible into 100 shares with a par value of $10. The market rate of similar nonconvertible debt is 9%. The fair value of the liability component using the "with-and-without" method is $3386516 $ 113484 $2479400 $908116

$3386516

Marigold Corp. offers its 120 employees to participate in an employee share-purchase plan. Under the terms of plan, employees are entitled to purchase 12 shares at 9% discount. The par values of shares were $10. Overall, 60 employees accepted the offer and each employee purchased six shares. The market price on purchase date was $120. Marigold Corp. will credit Share Premium―Ordinary for: Entry field with correct answer $3600 $36000 $39600 $43200

$39600

Vaughn Manufacturing follows IFRS for its external financial reporting. The following amounts were available at December 31, 2018: Interest paid $24900 Dividends paid 16600 Taxes paid on operations 36200 Under IFRS, what is the maximum amount that could be reported for cash used by financing activities for Vaughn Manufacturing for the year ended December 31, 2018? $77700 $52800 $61100 $41500

$41500

Coronado Industries offers its 120 employees to participate in an employee share-purchase plan. Under the terms of plan, employees are entitled to purchase 9 shares at 10% discount. The par values of shares were $10. Overall, 70 employees accepted the offer and each employee purchased six shares. The market price on purchase date was $110. What is the compensation expense recorded by Coronado Industries? Entry field with correct answer $37380 $41580 $46200 $ 4200

$41580

Crane Company follows IFRS for its external financial reporting. The following amounts were available at December 31, 2018: Interest paid $25400 Dividends paid 16900 Under IFRS, what is the maximum amount that could be reported for cash provided by operating activities for Crane Company for the year ended December 31, 2018? Entry field with correct answer $25400 $-0- $16900 $42300

$42300

Midland Company follows GAAP for its external financial reporting whereas Bailey Company follows IFRS for its external financial reporting. Both companies have defined-benefit pension plans. At December 31, 2018, prior to any adjusting entries, Midland Company's actuarial loss subject to amortization/recognition amounted to $55,000 and Bailey Company's actuarial loss subject to amortization/recognition amounted to $76,000. The remaining services lives of employees at both firms is estimated to be 10 years. What is the maximum amount of loss that could be recognized by each company in its income statement for the year ended December 31, 2018? Midland Bailey Entry field with correct answer $5,500 $76,000 $5,500 $7,600 $55,000 $76,000 $55,000 $7,600

$5,500 $76,000

Jerome Co. has the following deferred tax liabilities at December 31, 2018: Amount Related to $100,000 Installment sales, expected to be collected in 2019 $350,000 Fixed asset, 10-year remaining useful life, 2018 tax depreciation exceeds book depreciation $90,000 Prepaid insurance related to 2019 What amount would Jerome Co. report as a noncurrent deferred tax liability under IFRS and under GAAP? IFRS U.S. GAAP Entry field with correct answer $540,000 $350,000 $0 $450,000 $350,000 $350,000 $540,000 $540,000

$540,000 $350,000

Midland Company follows GAAP for its external financial reporting whereas Bailey Company follows IFRS for its external financial reporting. The amount contributed by Midland for its defined contribution plan for 2018 amounted to $55,000 and the amount contributed by Bailey for its defined contribution plan for 2018 amounted to $76,000. The remaining service lives of employees at both firms is estimated to be 10 years. What is the amount of expense related to pension costs recognized by each company in its income statement for the year ended December 31, 2018? Midland Bailey Entry field with correct answer $55,000 $ 7,600 $ 5,500 $ 7,600 $ 5,500 $76,000 $55,000 $76,000

$55,000 $76,000

Crane Company follows IFRS for its external financial reporting. The following amounts were available at December 31, 2018: Interest paid $21000 Dividends paid 15000 Taxes paid 36100 Under IFRS, what is the maximum amount that could be reported for cash used by operating activities for Crane Company for the year ended December 31, 2018? $72100 $36000 $57100 $51100

$72100

Which of the following is false regarding accounting for deferred taxes under IFRS? Tax effects of certain items are recognized in equity. A deferred tax asset is recognized up to the amount that is probable to be realized. A deferred tax liability is classified as current or noncurrent based on the classification of the asset or liability to which it relates. The rate used to compute deferred taxes is either the enacted tax rate, or a substantially enacted tax rate (virtually certain).

A deferred tax liability is classified as current or noncurrent based on the classification of the asset or liability to which it relates.

Which of the following differs in GAAP and IFRS? Accounting for convertible debt Calculation of EPS Model for recognizing stock-based compensation Modification of a share option

Accounting for convertible debt

With regard to recognition of deferred tax assets, IFRS requires Approach Recognition Entry field with correct answer Impairment approach Recognize asset in full, reduced by valuation allowance if it's more likely than not that all or a portion of the asset won't be realized Affirmative judgment Recognize asset in full, reduced by valuation allowance if it's more likely than not that all or a portion of the asset won't be realized Impairment approach Recognize an asset up to the amount that is probable to be realized Affirmative judgment Recognize an asset up to the amount that is probable to be realized

Affirmative judgment Recognize an asset up to the amount that is probable to be realized an asset up to the amount that is probable to be realized

Under IFRS, what is recorded as compensation expense for all employee share-purchase plans? Par value of shares Amount of discount Amount transferred to share premium Amount paid by employees

Amount of discount

Under IFRS, how are convertible debt recorded? Convertible debt is recorded as long-term liability. Convertible debt is added to current liability section, as it will be converted to equity. Convertible debt is separated into equity component and debt component. Convertible debt is recorded under stockholders' equity.

Convertible debt is separated into equity component and debt component.

A company can exclude a short-term obligation from current liabilities if it intends to refinance the obligation and has an unconditional right to defer settlement of the obligation for at least 12 months following the due date. Entry field with correct answer True False

False

Both GAAP and IFRS classify debt investments as trading, available-for-sale, and held-to-maturity. Entry field with correct answer True False

False

Correct answer. Your answer is correct. A statement of cash flows prepared according to IFRS requirements must be prepared using the direct method for operating activities. True False

False

IFRS allows for reduced disclosure of contingent liabilities if the disclosure could increase the company`s chance of losing a lawsuit. Entry field with correct answer True False

False

IFRS requires that any indirect effect of a change in accounting policy, such as increased royalty payments, be recognized in income in the year of the change in policy. Entry field with correct answer True False

False

IFRS requires that changes in estimate be accounted for using the retrospective method. True False

False

IFRS requires the use of straight-line method for amortization of a discount or premium. True False

False

In the United States, like many other countries, banks are major creditors as well as the largest investors. True False

False

Prior service cost is recognized on the balance sheet under both GAAP and IFRS. True False

False

Provisions are only recorded if it is likely that the company will have to settle an obligation at some point in the future. Entry field with correct answer True False

False

Short-term debt obligations are classified as current liabilities unless an agreement to refinance is completed before the financial statements are issued. Entry field with correct answer True False

False

The accounting for declaration and payment of dividends is different under IFRS and GAAP. Entry field with correct answer True False

False

The accounting for defined-benefit pension plans is the same under GAAP and IFRS. True False

False

U.S. GAAP and IFRS have the same accounting guideline for bond issue cost. True False

False

Under GAAP companies may either recognize actuarial gains and losses in income immediately or amortize them over the expected service lives of employees. Entry field with correct answer True False

False

Under GAAP, the rate used to compute deferred taxes is either the enacted tax rate, or a substantially enacted tax rate (virtually certain). True False

False

Under IFRS an affirmative judgment approach is used for recognizing deferred tax assets up to the amount that is probable to be realized. True False

False

Under IFRS companies report preference shares at par value as the last item in the equity section. True False

False

Under IFRS, a deferred tax liability is classified as current or noncurrent based on the classification of the asset or liability to which it relates. True False

False

Under IFRS, all tax effects are charged or credited to income. Entry field with correct answer True False

False

Under IFRS, bond issue costs are recorded as an asset. True False

False

Under IFRS, both the investor and the investee should follow the same accounting practices, requiring adjustments be made to the investor's books in order to prepare financial information. Entry field with correct answer True False

False

Under IFRS, companies are not required to prepare a statement of cash flows if the transactions are reported elsewhere in the financial statements. True False

False

Under IFRS, employee share-purchase plans must be recorded as an expense in the year it was issued by a company. Entry field with correct answer True False

False

Under IFRS, errors in financial statements are considered as an accounting change. True False

False

Under both GAAP and IFRS, the calculation of basic and diluted earnings per share is identical. True False

False

Detailed guidance regarding the accounting and reporting for the indirect effects of changes in accounting principle is available under GAAP only. Both GAAP and IFRS. IFRS only. neither GAAP nor IFRS.

GAAP only.

Match the approach, IFRS or GAAP, with the location where tax effects are reported: Approach Location Entry field with correct answer U.S. GAAP Charge or credit only deductible temporary differences to income IFRS Charge or credit only taxable temporary differences to income U.S. GAAP Charge or credit certain tax effects to equity IFRS Charge or credit certain tax effects to equity

IFRS Charge or credit certain tax effects to equity

Match the approach and location where unrealized holding gains and losses from non-trading equity investments are reported: Approach . Location where gains/ losses reported GAAP Equity IFRS Statement of Financial Position IFRS Part of net income IFRS Other comprehensive income

IFRS Other comprehensive income

With regard to recognizing stock-based compensation the reform of GAAP standards will not be addressed until IFRS standards have been finalized. it has been agreed that these standards will not be merged due to the differences in currencies. IFRS and GAAP follow the same model. IFRS and GAAP standards are undergoing major reform on valuation issues.

IFRS and GAAP follow the same model.

Convertible bonds are separated into the equity component of the bond issue and the debt component under GAAP and IFRS. Neither GAAP nor IFRS. IFRS only. GAAP only.

IFRS only.

With regard to contracts that can be settled in either cash or shares Entry field with correct answer GAAP requires that share settlement must be used. IFRS gives companies a choice of either cash or shares. IFRS requires that share settlement must be used. the FASB project proposes that the IASB adopt the GAAP approach, requiring that share settlement must be used.

IFRS requires that share settlement must be used.

Ridge, Inc. follows IFRS for its external financial reporting, and Cannon Company follows GAAP for its external financial reporting. During 2018, both companies changed depreciation methods, from double-declining balance to straight-line. Compared to double-declining balance, for Ridge, Inc. the change resulted in a decrease in reported depreciation expense of $90,000, and for Cannon Company the change resulted in a reported decrease in depreciation expense of $105,000. The remaining useful lives of the assets impacted by the change in depreciation method is 10 years for both companies. How would this change impact the net income reported by Ridge, Inc. and Cannon Company for the year ended December 31, 2018? Ridge, Inc. Cannon Company Increase $90,000 Increase $105,000 Increase $90,000 Increase $10,500 Decrease $90,000 Decrease $105,000 Increase $9,000 Increase $10,500

Increase $90,000 Increase $105,000

Under IFRS, which of the following is used to measure a liability, if a range of estimates is predicted and no amount in the range is more likely than any other amount in the range? Entry field with correct answer Maximum of the range Minimum of the range Average of the range Mid-point of the range

Mid-point of the range

Ocean Company follows IFRS for its external financial reporting. Which of the following methods of reporting are acceptable under IFRS for the items shown? Interest paid Dividends paid Investing Financing Operating Financing Operating Investing Financing Investing

Operating Financing

Ocean Company follows IFRS for its external financial reporting. Which of the following methods of reporting are acceptable under IFRS for the items shown? Interest received Dividends received Investing Financing Financing Investing Operating Financing Operating Investing

Operating Investing

Which of the following is false regarding the accounting for pensions under IFRS and GAAP? Prior service cost is amortized into income over the expected service lives of employees under GAAP only. Under GAAP companies must amortize actuarial gains and losses over the expected service lives of employees. Under IFRS companies may recognize actuarial gains and losses in income immediately. Prior service cost is recognized on the balance sheet under GAAP only.

Prior service cost is amortized into income over the expected service lives of employees under GAAP only.

Which of the following is true with regard to pension accounting under GAAP and IFRS? Prior service cost is recognized on the balance sheet under both GAAP and IFRS. Prior service cost is amortized into income over the expected service lives of employees under GAAP, not IFRS. Accounting for defined-benefit pensions is typically a less important issue in the U. S. than in other parts of the world. The accounting for defined-benefit pension plans is the same under GAAP and IFRS.

Prior service cost is amortized into income over the expected service lives of employees under GAAP, not IFRS.

Rushia Company has a non-trading investment in the 10%, 10-year bonds of Pear Company. The investment's carrying value is $3,200,000 at December 31, 2017. On January 9, 2018, Rushia learns that Pear Company has lost its primary manufacturing facility in an uninsured fire. As a result, Rushia determines that the investment is impaired and now has a fair value of $2,300,000. In June, 2019, Pear Company has succeeded in rebuilding its manufacturing facility, and its prospects have improved as a result. If Rushia Company determines that the fair value of the investment is now $3,900,000 and is using GAAP for its external financial reporting, which of the following is true? Rushia is prohibited from recording the recovery in value of the impaired investment. Rushia may record a recovery of $900,000. Rushia may record a recovery of $700,000. Rushia may record a recovery of $1,600,000.

Rushia is prohibited from recording the recovery in value of the impaired investment.

Rushia Company has a non-trading investment in the 10%, 10-year bonds of Pear Company. The investment's carrying value is $3,200,000 at December 31, 2017. On January 9, 2018, Rushia learns that Pear Company has lost its primary manufacturing facility in an uninsured fire. As a result, Rushia determines that the investment is impaired and now has a fair value of $2,300,000. In June, 2019, Pear Company has succeeded in rebuilding its manufacturing facility, and its prospects have improved as a result. If Rushia Company determines that the fair value of the investment is now $2,900,000 and is using IFRS for its external financial reporting, which of the following is true? Rushia may record a recovery of $600,000. Rushia may record a recovery of $900,000. Rushia is prohibited from recording the recovery in value of the impaired investment. Rushia may record a recovery, but is limited to 80% of the value of the recovery.

Rushia may record a recovery of $600,000.

Which of the following is false with regard to IFRS and the statement of cash flows? The IASB is strongly in favor of requiring use of the direct method for operating activities. In certain circumstances under IFRS, bank overdrafts are considered part of cash and cash equivalents. IFRS requires that noncash investing and financing activities be excluded from the statement of cash flows. All of these statements are false with regard to IFRS and the statement of cash flows.

The IASB is strongly in favor of requiring use of the direct method for operating activities.

In the "On the Horizon" feature in the text, which of the following is discussed regarding convergence of GAAP with IFRS? Entry field with correct answer The statement of cash flows will present only changes in cash and will exclude changes in cash equivalents. All of these choices are in "On the Horizon" regarding converging GAAP and IFRS. Noncash investing and financing activities will be disclosed only in the notes. Bank overdrafts will be classified as part of financing activities.

The statement of cash flows will present only changes in cash and will exclude changes in cash equivalents.

A provision differs from other liabilities in that there is greater uncertainty about the timing and amount of settlement. Entry field with correct answer True False

True

An onerous contract is one in which the unavoidable costs of satisfying the obligations outweigh the economic benefits to be received. True False

True

Both IFRS and GAAP allow that if determining the effect of a change in accounting principle is considered impracticable, then a company should report the effect of the change in the period in which it believes it practicable to do so. Entry field with correct answer True False

True

Contingent liabilities are not reported in the financial statements but may be disclosed in the notes to the financial statements if the likelihood of an unfavorable outcome is possible. True False

True

For purposes of recognizing a provision "probable" is defined as more likely than not True False

True

IFRS and GAAP have significant differences in the reporting of securities with characteristics of debt and equity, such as convertible debt. True False

True

IFRS requires that Company A consolidate Company B when it controls and owns more than 50% of Company B. True False

True

IFRS requires that compound instruments be separated into their liability and equity components for purposes of accounting. Entry field with correct answer True False

True

IFRS requires that gains and losses on non-trading equity securities be reported as part of other comprehensive income. Entry field with correct answer True False

True

IFRS uses the term "contingent" for assets and liabilities not recognized in the financial statement. True False

True

In certain circumstances under IFRS, bank overdrafts are considered part of cash and cash equivalents. Entry field with correct answer True False

True

Prior service cost is amortized into income over the expected service lives of employees under both GAAP and IFRS. True False

True

The definition of cash equivalents used in IFRS is similar to that used in GAAP. True False

True

Under IFRS companies may recognize actuarial gains and losses in income immediately. True False

True

Under IFRS the required procedure for amortization of a discount or premium is the effective-interest method. True False

True

Under IFRS true no-par shares should be carried in the accounts at issue price without any share premium reported. True False

True

Under IFRS, all potential liabilities associated with uncertain tax positions are recognized. Entry field with correct answer True False

True

Under IFRS, all troubled-debt restructurings are accounted for as extinguishments. Entry field with correct answer True False

True

Under IFRS, convertible bonds are "bifurcated"—separated into the equity component (the value of the conversion option) of the bond issue and the debt component. True False

True

Under IFRS, impairment charges related to held-for-collection debt securities may be reversed. True False

True

Under IFRS, noncash investing and financing activities are excluded from the statement of cash flows. Entry field with correct answer True False

True

Under IFRS, the direct effects of changes in the accounting policies are applied retrospectively. True False

True

All of the following are differences between IFRS and U.S. GAAP in accounting for liabilities except: Entry field with correct answer When a bond is issued at a discount U.S. GAAP records the discount in a separate contra-liability account. IFRS records the bond net of the discount. Under IFRS, bond issuance costs reduces the carrying value of the debt. Under U.S. GAAP, these costs are recorded as an asset and amortized to expense over the term of the bond. U.S. GAAP, but not IFRS uses the term "troubled debt restructurings." U.S. GAAP, but not IFRS uses the term "provisions" for contingent liabilities which are accrued.

U.S. GAAP, but not IFRS uses the term "provisions" for contingent liabilities which are accrued.

Which of the following is true regarding the statement of cash flows and IFRS? Entry field with correct answer Cash and cash equivalents are defined differently under IFRS than under GAAP. Companies preparing a complete set of financial statements under IFRS may exclude the statement of cash flows if the cash flow activity is reported in the notes to the financial statements. Under IFRS most companies choose to use the direct method of reporting cash flows from operating activities. Under IFRS noncash investing and financing activities are excluded from the statement of cash flows and instead are presented in the notes to the financial statements.

Under IFRS noncash investing and financing activities are excluded from the statement of cash flows and instead are presented in the notes to the financial statements.

For which of the following areas a provision may be recognized in the financial statement? Possibility of war Business recession Warranties Strike

Warranties

Is the following exception applicable to IFRS or GAAP? "If determining the effect of a correction of an error is considered impracticable, then a company should report the effect of the error correction in the period in which it believes it practicable to do so." IFRS U.S. GAAP Yes Yes No Yes No No Yes No

Yes No

Is the following exception applicable to IFRS or GAAP? "If determining the effect of a change in accounting principle is considered impracticable, then a company should report the effect of the change in the period in which it believes it practicable to do so." IFRS U.S. GAAP Entry field with correct answer Yes Yes Yes No No Yes No No

Yes Yes

The accounting for treasury stock retirements under IFRS requires Entry field with correct answer an allocation for the difference between paid-in capital and retained earnings. a charge for the excess of the cost of treasury stock over par value to retained earnings. a charge for the excess to paid-in capital, depending on the original transaction related to the issuance of the stock. a charge for the entire amount to paid-in capital.

a charge for the excess to paid-in capital, depending on the original transaction related to the issuance of the stock.

The IASB and the FASB are studying several issues related to accounting for pensions including all of the following except requiring companies to report various components of pension expense, such as interest cost, separately in the income statement along with other interest expense. requiring companies to report actual asset returns and any actuarial gains and losses directly in the income statement. adding smoothing provisions. eliminating smoothing provisions.

adding smoothing provisions.

Under IFRS, short-term obligations expected to be refinanced can be classified as noncurrent if the refinancing is completed: by the financial reporting date. either by the financial statement date or before the date the financial statement is issued. by issue date of the financial statement. after the maturity date of the obligation.

by the financial reporting date.

The Revaluation Surplus of IFRS is different than GAAP in that it allows the increase in valuation. similar to GAAP in that it allows both increases and decreases in valuation. similar to GAAP in that it only allows for the decrease in valuation. similar to GAAP in that it only allows for the increase in valuation.

different than GAAP in that it allows the increase in valuation.

IFRS generally assumes that all restructurings be accounted for as: amortization expense. loss on debt. extinguishments of debt. bad-debt expense.

extinguishments of debt.

Both IFRS and U.S. GAAP permit valuation of long-term debt and other liabilities at present value discounted at the firm's cost of capital. current market values of the obligations, based on changes in the discount rate with unrealized gains and losses reflected in a separate account in stockholders' equity. fair value with gains and losses on changes in fair value recorded in income in certain situations. historic costs without reflecting changes in valuation as obligations will be retired at their maturity date.

fair value with gains and losses on changes in fair value recorded in income in certain situations.

Contingent assets need not be disclosed in the financial statements or in the notes if they are: virtually certain to occur. probable to occur. likely to occur. possible but not probable to occur.

possible but not probable to occur.

The International Accounting Standards Board has proposed changes to IFRS pension accounting including all of the following except elimination of smoothing via the corridor approach. requiring recognition of actuarial gains and losses over the expected service lives of employees. different presentation of pension costs in the income statement. a new category of pensions for accounting purpose - "contribution-based promises."

requiring recognition of actuarial gains and losses over the expected service lives of employees.

IFRS requires bond issue costs: to be recorded as an asset. to be considered when computing income tax payable. to be netted against the carrying amount of the bonds. to be excluded while computing the interest expense.

to be netted against the carrying amount of the bonds.

Examples of contingent assets include all of the following except: unrealized gain on the sale of investments. pending lawsuit with a probable favorable outcome. promise of land to be donated by city as an enticement to move manufacturing facilities. possible refunds from the government in tax disputes.

unrealized gain on the sale of investments.

Under IFRS compliance requirements the Revaluation Surplus is considered as revenue when utilizing the GAAP formatted income statement. only utilized to record the changes in depreciable items - plant and equipment. utilized to record the changes in property, plant, and equipment and intangible assets. reported as contributed capital.

utilized to record the changes in property, plant, and equipment and intangible assets.