Question
How do IFRS and US GAAP differ for internally developed intangible assets in the development phase?
Tap to flip
Answer
IFRS may capitalize if criteria are met; US GAAP generally expenses them.
Tap to flip back
Question
Why does capitalizing a development cost initially raise reported income versus expensing it?
Tap to flip
Answer
Capitalization defers expense recognition, so current-period expense is lower.
Tap to flip back
Question
Why are trademarks and goodwill not amortized under this framework?
Tap to flip
Answer
They have indefinite lives, so they are tested for impairment instead.
Tap to flip back
Question
Under the indirect method, why are depreciation and amortization added back to net income in CFO?
Tap to flip
Answer
They are non-cash expenses.
Tap to flip back