Questions-600-6 Essay Example | Topics and Well Written Essays - 500 words

Questions-600-6 - Essay ExampleAlso, both standards differ on the criteria used in derecognizing receivables in that US standard uses loss of control plot the international standard combines loss of control and risk and rewards criterias.Recovery losses on prior impairments may be recorded by Walton under igenerally accepted accounting principles (Barden et al, 2009). On the other hand, under US GAAP, impairment reversals are not allowed. However, the loan balance after impairment is used as the new basis for the loan. study differences occur in the methods of valuing inventories. US GAAP allows use of LIFO (last in, First out) inventory valuation method while the international standard does not sanction LIFO (Barden et al, 2009). Also, US GAAP allows the cost of spoilage and idle capacity in inventory while iGAAP does not. Lastly, iGAAP allows reversal of write downs, if any, in inventories while UA GAAP does not.10% cabbage and loss test- The absolute value of the segments repor table profit loss is 10% or more of the greater of the overall reported profit of all segments reporting profits, or the absolute value of the combined reported losses of all segments reporting losses.To examine whether the reported segments are enough we volition test the operating segment revenue without the intersegment sales. The threshold here is 75%. Therefore enough segments are reportable segment revenues 75% consolidated revenues.b) Products costs should be matched with its associated product and revenues just as it is the case of annual reporting (Barden et al, 2009). Period costs are charged to earnings when incurred among interim periods.c) Income tax in interim financial statements should be based on the effective tax run for the entire year for ordinary earnings (Barden et al, 2009). The effective tax rate combines states and federal income tax rates such as capital gains, foreign tax rates