Question1) Identify and explain any two of the main accounting differences between U.S. GAAP and IFRS. Reference any outside sources used.
Question2) On January 1, ABC Corporation, a U.S. based manufacturer, buys 10 million yen worth of inventory from SA Corporation, a Japanese-based firm. The purchase is made on credit and the balance is to be paid in 3 months. The U.S. dollar/Japanese yen exchange rate was $1.00 = 125 yen on January 1, and $1.00 = 120 yen on April 1.
Create dated journal entries for ABC Corporation in U.S. dollars for incurrence and settlement of this foreign currency transaction. ABC Corporation employs two-transaction perspective.
Question 3) Download Nokia’s 2003 20-F report at the following URL: https://i.nokia.com/blob/view/-/264310/data/1/-/form20-f-03-pdf.pdf
(a) Refer to page 158 of the report. Name top 3 items (in Euros) that led to the difference between Nokia’s 2003 net income under U.S. GAAP and its 2003 net income under International Accounting Standards.
(b) Refer to note #36 of the report. In your own words, explain the main reason(s) why following items in the 2003 reconciliation of net income were positive or negative in amount (analyze each item separately):
• Development costs
• Stock compensation expense
• Amortization of goodwill
(c) In 2008, the U.S. SEC eliminated U.S. GAAP net income reconciliation requirement for foreign private issuers that adopt International Financial Reporting Standards. Do you agree with this decision? Why or why not?