16. With regard to contracts that can be settled in either cash or sharesIFRS requires that share settlement must be used.IFRS gives companies a choice of either cash or shares.GAAP requires that share settlement must be used.the FASB project proposes that the IASB adopt the GAAP approach, requiring that share settlement must be used.

GAAP and IFRS are two accounting boards that ensure accounting rules, principles, standards are duly complied which ensures uniformity, transparency while preparing books of accounts.Option 1 is the correct answer. With regard to contracts that can be settled in either cash or shares the mode opted shall be IFRS requires that share settlement must be used. This is done to ensure that it complies with all statutory obligations and norms. Conclusion: From the above we can conclude that Option 1 satisfies the given requirement in question whereas remaining options 2,3,4 do not satisfy the given requirement of question.

Answered: With regard to contracts that can be…

Business

Accounting

With regard to contracts that can be settled in either cash or shares IFRS requires

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

16. With regard to contracts that can be settled in either cash or shares

IFRS requires that share settlement must be used.
IFRS gives companies a choice of either cash or shares.
GAAP requires that share settlement must be used.
the FASB project proposes that the IASB adopt the GAAP approach, requiring that share settlement must be used.

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