Question

All of the following statements regarding recognition of receivables under U.S. GAAP and IFRS are true except: Multiple Choice Receivables that arise from revenue-generating activities are subject to broadly similar criteria for U.S. GAAP and IFRS. U.S. GAAP and IFRS have similar asset criteria that apply to recognition of receivables. The realization principle under GAAP implies an arm's length transaction occurs. Under U.S. GAAP, provision refers to a liability whose amount or timing is uncertain. Differences arise mainly from industry-specific guidance under U.S. GAAP.

Answer 1

Option D. Under US GAAP provision refers to a liability whose amount or timing is uncertain.

Step-by-step explanation:

Option A is correct because both the US GAAP and the IFRS has the same definition of the revenue which is the income from the core operation of the company and trade receivables are the receivables arising due to the core operations of the company which is same in the both cases.

Option B is also correct because the criteria for the recognition of assets that also applies to receivables is same.

Option C is correct because realization principle under GAAP and IFRS is the same which says that the revenue must only be recognized once the consideration agreed has been delivered by the organization.

Option D is incorrect statement because the under US GAAP, provisions are the liability whose amount and timings can be estimated easily.

Option E is correct because the US GAAP specifically focuses on the industry wide differences and encourages implementation of their set rules as they are more reliable than IFRS in such conditions. However IFRS has eliminated these discrepancies now so these are equally reliable as US GAAP.