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CFA Level 1 Question of the Week - Financial Reporting and Analysis

Matt_AnalystPrepMatt_AnalystPrep MontrealPosts: 141 Associate
edited October 2017 in Level 1 Questions
The main difference between IFRS and US GAAP with regard to cost model reporting is that:

CFA Level 1 Question of the Week - Financial Reporting and Analysis 7 votes

A. Under IFRS, assets must be depreciated separately.
0% 0 votes
B. Under IFRS, it is not required to review the residual value and useful life of an asset annually.
71% 5 votes
C. IFRS does prescribe a particular method for computing depreciation.
28% 2 votes

Comments

  • The correct answer is A.

    Under IFRS each asset must be depreciated separately. US GAAP does not require component depreciation. US GAAP does not require component depreciation. There is an explicit requirement under IFRS to review the residual value and useful life of an asset on an annual basis, and IFRS does not prescribe a particular method for computing depreciation.

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