International accounting standards are the standard followed by the international organizations having operations in countries other than US. However, the US entities follow the US GAAP and this creates the difference in the accounting principles and methods followed by the companies other than US. Hence, to bring harmony in the financial statements, IFRS has been introduced, so that all companies follow the same method of accounting all over the world. a. How accounting for merchandise purchases and sales is different between accounting under IFRS versus U.S. GAAP? b. What do finance costs refer to in the income statements prepared under IFRS? c. Does IFRS permit alternative measures of income reported in income statement?

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Chapter 5, Problem 18QS

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International accounting standards are the standard followed by the international organizations having operations in countries other than US. However, the US entities follow the US GAAP and this creates the difference in the accounting principles and methods followed by the companies other than US. Hence, to bring harmony in the financial statements, IFRS has been introduced, so that all companies follow the same method of accounting all over the world.

a. How accounting for merchandise purchases and sales is different between accounting under IFRS versus U.S. GAAP?

b. What do finance costs refer to in the income statements prepared under IFRS?

c. Does IFRS permit alternative measures of income reported in income statement?

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