A European based company follows IFRS (Internation
A European based company follows IFRS (International Financial Reporting Standards) and capitalizes new product development costs. During 2008 they spent€25 million on new product development and reported an amortization expense related to a prior year’s new product development of €10 million. Other information related to 2008 is as follows:
An analyst would like to compare the European company to a similar U.S. based company and has decided to adjust their financial statements to U.S. GAAP. Under U.S. GAAP, and ignoring tax effects, the cash flow from operations (€ millions) for the company would be closest to:
A. 265.
B. 275.
C. 290.
参考解答
420***102
2024-11-15 01:33:15
Ans:A.
If all development costs had been expensed then net income would be reduced by the amount spent, and increased by the amortization of the previously capitalized amounts: 225 – 25 + 10 = 210 million. CFO would be lower by the amount spent on development 290 – 25 = 265 million. Note: The amortization of previous development costs is a non-cash expense so does not affect cash flow.
相似问题
Lazlo Ltd a European-based telecommunications pro
Lazlo Ltd, a European-based telecommunications providers, follows IASB GAAP and capitalizes new product development costs Durin
A company which prepares its financial statements
A company, which prepares its financial statements according to IFRS, owns several investment properties on which it earns re
A company records an asset retirement obligation (
A company records an asset retirement obligation (ARO) because of environmental damage Which of the following will most like
3 depreciation expense is closest to:A. $27 200B.$
3 depreciation expense is closest to:A $27,200B $16,320C $9,792
The effects on a firm’s financial statement in the
The effects on a firm’s financial statement in the initial year when cost of an asset is expensed rather than capitalized
