The main difference between IFRS and US GAAP with regard to cost model reporting is that: A. Under IFRS, assets must be depreciated separately. B. Under IFRS, it is not required to review the residual value and useful life of an asset annually. C. IFRS does prescribe a particular method for computing depreciation.

The correct answer is A. Under IFRS each asset must be depreciated separately. US GAAP does not require component depreciation. US GAAP does not require component depreciation. There is an explicit requirement under IFRS to review the residual value and useful life of an asset on an annual basis, and IFRS does not prescribe a particular method for computing depreciation.

CFA Level 1 Question Of The Week - Financial Reporting And Analysis (8) - CFA Level 1

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This topic has 1 reply, 1 voice, and was last updated Jul-1910:25 pm by Matt_AnalystPrep.

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- Matt_AnalystPrep
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  - CFA Charterholder
  03 Jul 2019 at 9:44 pm
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  The main difference
  between IFRS and US GAAP with regard to cost model reporting is that:
  - A. Under IFRS, assets must be depreciated separately.
  - B. Under IFRS, it is not required to review the residual value and useful
    life of an asset annually.
  - C. IFRS does prescribe a particular method for computing depreciation.
- Matt_AnalystPrep
  Participant
  - CFA Charterholder
  07 Jul 2019 at 10:25 pm
  Up
  1
  ::
  The correct answer is A.
  
  Under IFRS each asset
  must be depreciated separately. US GAAP does not require component
  depreciation. US GAAP does not require component depreciation. There is an explicit requirement under IFRS to review the residual value and useful life of an asset on an annual basis, and IFRS does not prescribe a particular method for computing depreciation.
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