17. Which of the statements is true? a) All others being equal, companies that follow GAAP may expense the cost of a major overhaul sooner than companies that follow IFRS. b) All others being equal, companies that follow GAAP may expense advertising costs sooner than companies that follow IFRS. c) Neither a) nor b) is true. Answer and Brief Explanation: 18. On May 1 2016, a company issued convertible bonds for $420,000. The value of the equity component is $20,000 and the value of the debt component is $400,000. Which of the following statements is correct? a) Under US GAAP, the company should credit liability of $400,000 upon the issuance of convertible bonds. b) Under IFRS, the company should credit liability of $420,000 upon the issuance of convertible bonds. c) Under IFRS, the company should credit equity $20,000 upon the issuance of convertible bonds. d) Under US GAAP, the company should debit equity $20,000 upon the issuance of convertible bonds. Answer and Brief Explanation: 19. Which of the following statements regarding equity investment under US GAAP is false? a) Equity investment are generally measured at fair value through other comprehensive income. b) Reporting entities can use net asset value to measure the fair value of investments in certain funds. c) Reporting entities can elect the "measurement alternatives" upon the acquisition of an equity instrument. d) All of the above statements are true. Answer and Brief Explanation: 20. Bank overdrafts are generally regarded as a component of an entity's cash and cash equivalent under IFRS. True or false? a) True b) Fales Answer and Brief Explanation