Assume that three
accountants have been selected to measure the net income of a firm under U.S....

Question

Assume that three
accountants have been selected to measure the net income of a firm under U.S. Generally
Accepted Accounting Principles (U.S.
GAAP) and International Financial Reporting Standards (IFRS).
The results under U.S. GAAP (M1) were net
incomes of $15,000, $13,000, and $11,000. Under IFRS
(M2), results were $25,000, $20,000, and $15,000.

Required: 
Determine the objectivity
of each of the two measurement systems for the year under consideration. On the
basis of your examination, which of the two systems would you prefer? Explain.

Robert · Accepted Answer

SOLUTION: 
On the examination of net income under both the methods, it can be concluded that net income 
under international financial reporting standards is greater than net income calculated under 
generally accepted principles. The difference may be attributable to the overstatement of 
revenues or understatement of expenses under international financial reporting standards.

Assume that three accountants have been selected to measure the net income of a firm under U.S. Generally Accepted Accounting Principles (U.S. GAAP) and International Financial Reporting Standards...

Solution

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment