Consider the following statements regarding differences between U.S. and international accounting standards: Statement 1: The IASB and FASB hope to eliminate most differences between U.S. and foreign accounting by 2010. Statement 2: The U.S. accounting standards require the immediate expensing of share-based compensation, but international standards in some cases allow for a delay in expensing. Statement 3: U.S. standards for consolidation allow for a variable interest model, while international accounting for consolidation revolves around the concept of control. Which statement is least accurate? A) Statement 2. B) Statement 3. C) Statement 1.
a?
A? Statement2 - looks bad ???
A. In the Schweser text, I believe I read that share-based compensation can be expensed over a vested period. Not sure though. EDIT: I am referring to US GAAP.
Statement 2: The U.S. accounting standards require the immediate expensing of share-based compensation, but international standards in some cases allow for a delay in expensing. Choice A
A for sure. The IFRS requires immediate expensing of share-based comp.
A - agreed. basically ive lodged in my mind that IFRS promotes fair value, and that usually means that companies cook their books less so numbers like ROA, ROE, leverage look worse than GAAP. so, it would make sense for IFRS to promote aggressive expense booking.
A
You know bannisja only posts tricky questions. She’s going to come out and tell us we’re all wrong, although it looks like A is obvious…
Don’t leave us hanging, Banni!!
A
sorry- i forgot i even posted this. it was statement 2 that was wrong. so A. good job peeps. i just figured I’d post it up seeing as we’re all about GAAP vs IFRS now. nice work team.