Question

T/F: Both GAAP and IFRS are increasing the use of fair value to report assets, but at this point GAAP has adopted it more broadly

Answer 1

The statement that GAAP has adopted the use of fair value more broadly than IFRS is not accurate; IFRS has several instances where it has been more proactive in using fair value measurement.

Step-by-step explanation:

True or false: Both GAAP and IFRS are increasing the use of fair value to report assets, but at this point, GAAP has adopted it more broadly is a statement that relates to accounting standards used by companies for financial reporting. The Generally Accepted Accounting Principles (GAAP) are commonly followed in the United States, while the International Financial Reporting Standards (IFRS) are used in many other countries.

While it is true that both GAAP and IFRS have been moving towards the use of fair value measurements in recent times, it is a common misconception that GAAP has adopted it more broadly. In fact, IFRS has, in several instances, been more proactive in using fair value as a measurement basis. An example of this would be IFRS 13, the fair value measurement standard, which applies to all IFRS standards that require or permit fair value measurements and disclosures.