Question

In accounting for short-term debt expected to be refinanced to long-term debt:

A. GAAP uses the authorization date to determine classification of short-term debt to be refinanced.
B. IFRS uses the financial statement date to determine classification of short-term debt to be refinanced.
C. IFRS uses the authorization date to determine classification of short-term debt to be refinanced.
D. GAAP uses the date of issue, but only for secured debt, to determine classification of short-term debt to be refinanced.

Answer 1

GAAP and IFRS use different criteria to determine the classification of short-term debt to be refinanced.

Step-by-step explanation:

In accounting for short-term debt expected to be refinanced to long-term debt:

1. GAAP uses the authorization date to determine classification of short-term debt to be refinanced.
2. IFRS uses the financial statement date to determine classification of short-term debt to be refinanced.
3. GAAP uses the date of issue, but only for secured debt, to determine classification of short-term debt to be refinanced.