Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Indicate the differences in accounting treatment under IFRS and under US GAAP for the following situations as of December 31, 2022: 1. Inventory: At the

Indicate the differences in accounting treatment under IFRS and under US GAAP for the following situations as of December 31, 2022: 1. Inventory: At the end of the year 2022, the inventory information was as follows: Historical cost of $250,000 Replacement cost $180,000 Net Realizable Value $210,000 Normal profit margin of 15%

2. Property, plant and equipment The company acquired a building at the beginning of 2021 with the following information: -Cost of $2,750,000 -Estimated useful life of 25 years -Estimated residual value of $250,000 -It is depreciated using the straight-line method. At the beginning of 2022, the market value of the building was $3,250,000. There is no change in residual value or estimated useful life.

3. Intangible assets As part of a business combination in 2019, the company acquired a brand with a market value of $40,000. The brand is classified as an asset intangible with indefinite life. In the year 2022, it was determined that the brand has: - a sale price of $35,000 with $0 costs to sell - Expected future cash flows from continued use of the $42,000 brand - Present value of future cash flows of $34,000

4. Research and development costs The company incurred research and development costs of $300,000 in 2022. From 40% of that amount is related to development activities. criteria are met to classify the disbursement as an intangible asset. At the end of the year 2022 the new product is not complete.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing And Assurance Services Plus Pearson MyLab Accounting With Pearson EText

Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan

17th Global Edition

1292312106, 978-1292312101

More Books

Students also viewed these Accounting questions

Question

1. Define mass and mediated communication

Answered: 1 week ago