What kinds of temporary differences related to income taxes can arise under IFRS that don't occur under U.S.GAAP?
A)book and tax differences related to the revaluation of property,plant,and equipment for book purposes and cost method for tax purposes.
B)book and tax differences related to the calculation of impairments for book purposes with no like adjustment for tax purposes.
C)both (A)and (B)
D)use of the LIFO inventory method for book purposes and the FIFO inventory method for tax purposes.

Question

Quizplus · Accepted Answer

Under IFRS, revaluations of property, plant, and equipment are allowed and create temporary differences between book and tax values. Additionally, impairments may be recognized for book purposes but not for tax purposes, also creating temporary differences. These temporary differences do not typically occur under US GAAP where revaluations are not allowed and impairment methods differ. In contrast, the use of LIFO inventory method for book purposes and FIFO inventory method for tax purposes can create temporary differences under US GAAP but not under IFRS since the use of LIFO is prohibited under IFRS.

What Kinds of Temporary Differences Related to Income Taxes Can