Discuss the qualitative concept of comparability

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Reference no: EM131241628

International Versus U.S. Standards

PART 1

Write a 200 word discussion answer for each scenario.

Format your paper consistent with APA guidelines

A. Client X contacted you for clarification and recommendations regarding whether interest cost on construction of a new warehouse may be included in the cost of the new warehouse.

B. Client X contacted you for clarification and recommendations regarding in what instances should goodwill be adjusted for impairment?

PART 2

Write a 700- to 1,050-word response to the questions located at the end of the following case: include an in-depth introduction and conclusion

• Case 3-5 International versus U.S. Standards (page 114)

Under U.S. GAAP, property, plant, and equipment are reported at historical cost net of accumulated depreciation. These assets are written down to fair value when it is determined that they have been impaired.

A number of other countries, including Australia, Brazil, England, Mexico, and Singapore, permit the revaluation of property, plant, and equipment to their current cost as of the balance sheet date. The primary argument favoring revaluation is that the historical cost of assets purchased ten, twenty, or more years ago is not meaningful.

A primary argument against revaluation is the lack of objectivity in arriving at current cost estimates, particularly for old assets that either will not or cannot be replaced with similar assets or for which no comparable or similar assets are currently available for purchase.

• Answer the following questions

A. Discuss the qualitative concept of comparability. In your opinion, would the financial statements of companies operating in one of the foreign countries listed above be comparable to a U.S. company's financial statements? Explain.

B. Discuss the concept of reliability. In your opinion, would the amounts reported by U.S. companies for property, plant, and equipment be more or less reliable than the current cost amounts reported by companies in England, Mexico, or elsewhere?

C. Discuss the concept of relevance. In your opinion, would the amounts reported by U.S. companies for property, plant, and equipment be more or less relevant than the current cost amounts reported by companies in England, Mexico, or elsewhere?

Format your paper consistent with APA guidelines.l

Reference no: EM131241628

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