Which of the following items is not one of the likely accounting issues to resolve for the opening IFRS balance sheet? A U.S. company has many foreign subsidiaries and wants to convert its consolidated financial statements from U.S. GAAP to IFRS.
A. Classifying deferred taxes as current or noncurrent. B. Capitalizing development costs. C. Acquisition value for a subsidiary. D. Liability for restructuring charges. E. Inventory valuation.
The correct answer to this question is C, Acquisition value for a subsidiary. IFRS stands for International Financial Reporting Standards. These standards are used in accounting. It provides a guideline for how companies prepare their financial statements, as well as how they disclose it.
This guideline is not set in stone and not deemed as a specific set of rules. IFRS's are essential to companies that have subgroups in different countries. There are currently over 100 countries who require the use of IFRS. These standards can also be used to help credit ratings, along with helping the company meet compliance.