Question
Why must analysts adjust multinational peers for IFRS vs US GAAP differences before comparing ratios?
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Answer
To make comparisons apples-to-apples.
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Question
Why do inventory write-down reversals affect ratio comparability across IFRS and US GAAP firms?
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Answer
IFRS can later increase inventory and income; US GAAP cannot.
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Question
If both research and development costs are generally expensed as incurred, which framework is being applied?
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Answer
US GAAP.
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Question
Why can development-cost treatment reduce comparability between an IFRS firm and a US GAAP firm?
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Answer
IFRS may capitalize more, raising assets and earnings versus US GAAP.
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