U under ifrs companies must classify expenses by

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u Under IFRS, companies must classify expenses by either nature or function. GAAP does not have that requirement, but the U.S. SEC requires a functional presentation. u IFRS identifies certain minimum items that should be presented on the income statement. GAAP has no minimum information requirements. However, the SEC rules have more rigorous presentation requirements.
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RELEVANT FACTS u IFRS does not define key measures like income from operations. SEC regulations define many key measures and provide requirements and limitations on companies reporting non- GAAP/IFRS information. u GAAP does not require companies to indicate the amount of net income attributable to non-controlling interest. u GAAP and IFRS follow the same presentation guidelines for discontinued operations, but IFRS defines a discontinued operation more narrowly. Both standard- setters have indicated a willingness to develop a similar definition to be used in the joint project on financial statement presentation.
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RELEVANT FACTS u Both GAAP and IFRS have items that are recognized in equity as part of comprehensive income but do not affect net income. GAAP provides three possible formats for presenting this information: single income statement, combined statement of comprehensive income, in the statement of stockholders’ equity. Most companies that follow GAAP present this information in the statement of stockholders’ equity. IFRS allows a separate statement of comprehensive income or a combined statement. u Under IFRS, revaluation of property, plant, and equipment, and intangible assets is permitted and is reported as other comprehensive income. The effect of this difference is that application of IFRS results in more transactions affecting equity but not net income.
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Which of the following is not reported in an income statement under IFRS? a. Discontinued operations. b. Extraordinary items. c. Cost of goods sold. d. Income tax. IFRS SELF-TEST QUESTION
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Which of the following statements is correct regarding income reporting under IFRS? a. IFRS does not permit revaluation of property, plant, and equipment, and intangible assets. b. IFRS provides the same options for reporting comprehensive income as GAAP. c. Companies must classify expenses either by nature or function. d. IFRS provides a definition for all items presented in the income statement. IFRS SELF-TEST QUESTION
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Which of the following is not an acceptable way of displaying the components of other comprehensive income under IFRS? a. Within the statement of retained earnings. b. Second income statement. c. Combined statement of comprehensive income. d. All of the above are acceptable. IFRS SELF-TEST QUESTION
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