Which one of the following describes a difference in how the equity method is applied under GAAP than under IFRS?
A) the equity method is generally applied to limited partnerships under IFRS for investments of more than 3 to 5%, whereas GAAP adopts a "significant influence" principle.
B) IFRS requires uniform accounting policies, whereas GAAP does not.
C) significant influence is presumed if the investor has 20% or more of the voting rights in a corporate investee under GAAP, whereas IFRS adopts a "facts and circumstances" approach that looks beyond the voting rights percentage.
D) GAAP requires consideration of potential voting rights on currently exercisable of convertible instruments, whereas IFRS does not.

Question

Quizplus · Accepted Answer

IFRS requires that an investor apply uniform accounting policies for similar transactions and other events in similar circumstances, whereas GAAP does not have this specific requirement for the equity method of accounting. This difference emphasizes the IFRS focus on comparability across entities.

Which One of the Following Describes a Difference in How