Rustic Company has recognized an impairment loss on the value of inventory. If the inventory's value subsequently recovers, under which accounting standards may Rustic revalue the inventory upward and recognize a gain? A) Neither IFRS nor U.S. GAAP allows a recovery in inventory value to be recognized as a gain. B) IFRS allows a recovery in inventory value to be recognized as a gain, but U.S. GAAP does not. c) U.S. GAAP allows a recovery in inventory value to be recognized as a gain, but IFRS does not.

Rustic Company has recognized an impairment loss on the value of inventory. If the inventory's value subsequently recovers, under which accounting standards may Rustic revalue the inventory upward and recognize a gain? A) Neither IFRS nor U.S. GAAP allows a recovery in inventory value to be recognized as a gain. B) IFRS allows a recovery in inventory value to be recognized as a gain, but U.S. GAAP does not. c) U.S. GAAP allows a recovery in inventory value to be recognized as a gain, but IFRS does not.

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter11: Auditing Inventory, Goods And Services, And Accounts Payable: The Acquisition And Payment Cycle

Section: Chapter Questions

Problem 12CYBK

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When a company changes its inventory method to LIFO, an exception is made for the way accounting changes usually are reported. Explain the difference in the accounting treatment of a change to the LIFO inventory method from other inventory method changes.
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