CFA CFA Level 1 CFA Level 1 Question of the Week – Financial Reporting and Analysis

CFA Level 1 Question of the Week – Financial Reporting and Analysis

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    • Matt_AnalystPrep
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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
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      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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