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hello
A multinational company maintains its financial records under both IFRS and U.S. GAAP. Last year, the company determined its inventory was impaired because demand for its product collapsed when a competitor launched a new product with innovative features. As a result, the company wrote down its inventory to $0 with a carrying amount of $500,000. This year, however, government authorities unexpectedly announced that the competitor's product was defective and the product was removed from the market. As a result, the company's products were again in demand and the company estimated their net realizable value to be $750,000 at the end of the current quarter. How should the company record this new development in the current quarter?
a. Under IFRS, $0 write-up of the inventory; under U.S. GAAP, $0 write-up of the inventory.
b. Under IFRS, $500,000 write-up of the inventory; under U.S. GAAP, $0 write-up of the inventory.
c. Under IFRS, 750,000 write-up of the inventory; under U.S. GAAP, $0 write-up of the inventory.
d. Under IFRS, $750,000 write-up of the inventory; under U.S. GAAP, $750,000 write-up of the inventory.
Please help


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FIRDDAUS KUDOOR
India
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Original Message------

hello
A multinational company maintains its financial records under both IFRS and U.S. GAAP. Last year, the company determined its inventory was impaired because demand for its product collapsed when a competitor launched a new product with innovative features. As a result, the company wrote down its inventory to $0 with a carrying amount of $500,000. This year, however, government authorities unexpectedly announced that the competitor's product was defective and the product was removed from the market. As a result, the company's products were again in demand and the company estimated their net realizable value to be $750,000 at the end of the current quarter. How should the company record this new development in the current quarter?
a. Under IFRS, $0 write-up of the inventory; under U.S. GAAP, $0 write-up of the inventory.
b. Under IFRS, $500,000 write-up of the inventory; under U.S. GAAP, $0 write-up of the inventory.
c. Under IFRS, 750,000 write-up of the inventory; under U.S. GAAP, $0 write-up of the inventory.
d. Under IFRS, $750,000 write-up of the inventory; under U.S. GAAP, $750,000 write-up of the inventory.
Please help


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FIRDDAUS KUDOOR
India
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I think the Answer is (B),


because unfrr IFRS the recovery of the written off inventory is up to the original value and NOT over it even if the market is above original cost. And for the GAAP, recovery is not allowed.


Original Message------

hello
A multinational company maintains its financial records under both IFRS and U.S. GAAP. Last year, the company determined its inventory was impaired because demand for its product collapsed when a competitor launched a new product with innovative features. As a result, the company wrote down its inventory to $0 with a carrying amount of $500,000. This year, however, government authorities unexpectedly announced that the competitor's product was defective and the product was removed from the market. As a result, the company's products were again in demand and the company estimated their net realizable value to be $750,000 at the end of the current quarter. How should the company record this new development in the current quarter?
a. Under IFRS, $0 write-up of the inventory; under U.S. GAAP, $0 write-up of the inventory.
b. Under IFRS, $500,000 write-up of the inventory; under U.S. GAAP, $0 write-up of the inventory.
c. Under IFRS, 750,000 write-up of the inventory; under U.S. GAAP, $0 write-up of the inventory.
d. Under IFRS, $750,000 write-up of the inventory; under U.S. GAAP, $750,000 write-up of the inventory.
Please help


------------------------------
FIRDDAUS KUDOOR
India
------------------------------

I agree with B being the choice

Sent from my iPhone


Original Message------

I think the Answer is (B),


because unfrr IFRS the recovery of the written off inventory is up to the original value and NOT over it even if the market is above original cost. And for the GAAP, recovery is not allowed.