For example income under ifrs includes both revenues

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Cornerstones of Cost Management
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Chapter 17 / Exercise 5
Cornerstones of Cost Management
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losses, differs somewhat between IFRS and GAAP. For example, incomeunder IFRS includes both revenues, which arise during the normal course of operating activities, and gains, which arise from activities outside of the normal sales of goods and services. The term income is not used this way under GAAP. Instead, under GAAP income refers to the net difference between revenues and expenses.Under IFRS, expenses include both those costs incurred in the normal course of operations as well as losses that are not part of normal operations. This is in contrast to GAAP, which defines each separately.LOOKING TO THE FUTUREThe IASB and FASB are completing a joint project on revenue recognition. Thepurpose of this project is to develop comprehensive guidance on when to recognize revenue. Presently, the Boards are considering an approach that focuses on changes in assets and liabilities (rather than on earned and realized) as the basis for revenue recognition. It is hoped that this approach will lead to more consistent accounting in this area. For more on this topic, see .IFRS PracticeIFRS SELF‐TEST QUESTIONS1. IFRS:(a) uses accrual accounting.
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Chapter 17 / Exercise 5
Cornerstones of Cost Management
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(b) uses cash‐basis accounting.(c) allows revenue to be recognized when a customer makes an order.(d) requires that revenue not be recognized until cash is received. 2.Which of the following statements is false? 3.As a result of the revenue recognition project by the FASB and IASB: 4.Which of the following is false? 5.Accrual‐basis accounting: (a) is optional under IFRS.(b) results in companies recording transactions that change a company's financial statements in the period in which events occur.(c) has been eliminated as a result of the IASB/FASB joint project on revenue recognition.(d) is not consistent with the IASB conceptual framework.INTERNATIONAL FINANCIAL REPORTING PROBLEM: Louis VuittonIFRS4-1The financial statements of Louis Vuittonare presented in Appendix F. Instructions for accessing and using the company's complete annual report, including the notes to its financial statements, are also provided in Appendix F .

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