International Financial Reporting Standards
They are commonly known as IFRS. It is a set of accounting standards which are developed by independent (Non-profit) organization called as International Accounting Standards Board (IASB). It is universally accepted set of standards which states the rules and practice for accounting practice.
Financial Accounting Standards Board
It is commonly known as FASB. It is a private, non-profit organization which is a standard setting body. The main purpose of the FASB is to create and improve GAAP (Generally Accepted Accounting Principles) within the US. GAAP is a collection of generally practiced and followed rules and standards of accounting. GAAP provides global guidelines for preparation and disclosure of financial statements of public companies.
To Explain: if finance lease under IFRS can be classified as an operating lease under U.S. GAAP
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INTER. ACCOUNTING - CONNECT+ALEKS ACCESS
- Why are compound interest concepts appropriate and applicable in accounting for a sales-type lease?arrow_forwardHow might the definition of “probable” affect determining whether a contract exists under IFRS as compared to U.S. GAAP?arrow_forwardFor companies that prepare their financial statements in accordance with both U.S. GAAP and IFRS, a lease is deemed to be a capital lease (usually called a finance lease under IFRS) if substantially all risks and rewards of ownership are transferred. In making this distinction, less judgment, more specificity is applied using a. IFRS. b. U.S. GAAP. c. Either U.S. GAAP or IFRS. d. Neither U.S. GAAP nor IFRS.arrow_forward
- In Note 4, “Summary of accounting policies,” part 4.14, “Leases,” AF states that“leases are classified as finance leases when the lease arrangement transferssubstantially all the risks and rewards of ownership to the lessee.” Is this the policycompanies using U.S. GAAP follow?arrow_forwardUnder US GAAP, It is possible that the lessor changes the lease classification from operating lease to sale-type ( or the other way around) when the lease term is modified. O True O Falsearrow_forwardWhere can we obtain reliable guidelines on IFRS lease accounting?arrow_forward
- What is the basic difference between the accounting procedures used by a lessor for a sales-type lease and those used for a direct-financing lease?arrow_forwardWhen a sale-leaseback transaction occurs, if the leaseback is considered to be an operating lease, and the lease payments and sales price are at fair value, any gain on the sale a. Is amortized over the lease term by a company using IFRS. b. Is recognized immediately by a company using IFRS. c. Is amortized over the lease term by a company using either U.S. GAAP or IFRS. d. Is not recorded by a company using IFRS.arrow_forwardDiscuss the primary differences between U.S. GAAP and IFRS with respect to current liabilities and contingencies.arrow_forward
- What are the criteria for classifying a lease as operating or capital? Why is there a difference between the two? What are the implications of an operating lease versus a capital lease on an entity’s financial statements?arrow_forwardWhy would a lease include a contingent payment provision? Explain.arrow_forwardWhat is the difference between a tax-oriented lease and a nontax-oriented lease?arrow_forward
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