Under U.S. GAAP & IAS 23, interest on loans/borrowings used for constructing a qualifying asset must be:

A) expensed in the period they are incurred.

B) capitalized as part of a qualifying long-term (i.e. non-current) asset's initial cost.

C) charged against revenue in the year the asset is sold.

D) charged against revenue in the year the asset is put into service.

Assume a company raised a $1,000,000 loan on 1/1/2020 that was specifically taken out to fund the construction of its new HQ building. The loan had a 10% interest rate. A payment of $200,000 was made to contractors on 1/1/2020, and the balance of $800,000 was paid to them on 10/1/2020. $10,000 of interest income was earned on the unused part of the loan. The building was completed on 12/31/2020. The amount of interest and borrowing costs capitalized in 2020 as part of the asset's initial cost would be:

A)$400,000 under U.S. GAAP and $1,000,000 under IAS 23.

B) $40,000 under U.S. GAAP and $100,000 under IAS 23.

C) $100,000 under U.S. GAAP and $90,000 under IAS 23.

D) $40,000 under U.S. GAAP and $90,000 under IAS 23.

During the year to 12/31/2020, Willie incurred $500,000 developing and completing a new product that meets the capitalization criteria of IAS 38. The product will be ready for sale on 1/1/2021, and has a life of five years.2020 net income and retained earnings at 12/31/2020 reported by IFRS would be:

A)Both 2020 net income and 12/31 retained earnings would be $500,000 higher than U.S. GAAP.

B) 2020 Net income would be $100,000 lower and retained earnings at 12/31/2020 would be $200,000 higher than US GAAP.

C) 2020 Net income would be $100,000 higher and retained earnings at 12/31/2020 would be $300,000 higher than US GAAP.

D) 2020 Net income would be $100,000 lower and retained earnings at 112/31/2020 would be $300,000 higher than US GAAP.

During 2018, Willie Ltd incurred $200,000 developing and completing a new product that meets the capitalization criteria of IAS 38. The product went on sale on 1/1/2019 and had a useful economic life of five years.When compared to the figures reported in the US GAAP financial, IFRS net income for the year ended 12/31/2020 and retained earnings at 12/31/2020 reported would be:

A)IFRS net income for 2020 would be $40,000 higher than US GAAP, and retained earnings at 12/31/2020 would also be $40,000 higher.

B) IFRS net income for 2020 would be $40,000 lower than US GAAP, but retained earnings at 12/31/2020 would be $40,000 lower than US GAAP.

C) IFRS net income for 2020 would be $40,000 lower than US GAAP, but retained earnings at 12/31/2020 would be $120,000 higher than US GAAP.

D) IFRS net income for 2020 would be $80,000 lower than that reported by US GAAP, but retained earnings at 12/31/2020 would be $120,000 higher than US GAAP.

Using IAS 16, a revaluation of PPE not held for investment purposes, results in a gain that is:

A) Debited to revaluation reserve

B) Credited to the buildings account

C) Credited to revaluation reserve

D) Credited to net income

The following inventory information above was taken from the records of Stock Ltd:

Historic cost $24,000

Replacement cost $16,000

Selling price (SP) $20,000

Costs to finish and sell $1,000

Normal profit margin 10% of SP

6. Under U.S. GAAP, how would ending inventory be measured if LIFO was used?

A) $17,000

B) $16,000

C) $19,000

D) $20,000

7. Under U.S. GAAP, how would ending inventory be measured if FIFO was used?

A) $17,000

B) $16,000

C) $19,000

D) $20,000

8. Under IAS 2, what figure should the balance sheet report for ending inventory?

A) $17,000

B) $16,000

C) $19,000

D) $20,000

The following information was taken from the records of Impress Ltd as of December 31, 2020:

Carrying value of a property $400,000

Selling price (fair value) of the property $340,000

Cost of disposing of the property $12,000

Expected future cash flows from use $300,000

Present value of expected future cash flows from use $252,000

9. Using U.S. GAAP, calculate the impairment loss on the property

A) $148,000

B) $100,000

C) $60,000

D) $72,000

10. Using IAS 36, calculate the recoverable amount for the property

A) $300,000

B) $328,000

C) $252,000

D) $3400,00

11. Using IAS 36, calculate the impairment loss on the property under IFRS.

A) $100,000

B) $148,000

C) $60,000

D) $72,000