Most preferred stock is reported under IFRS as debt, with the dividends reported in the income statement
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1. What is the definition of a liability? What is the definition of stockholders’ equity? You may wish to refer back to Chapter 1.
2. Defend the IFRS position that preferred stock is a liability.
3. Defend the U. S. GAAP position that preferred stock is part of stockholders’ equity.
4. Based on the above, where do you recommend preferred stock be reported?
GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...
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Related Book For
Financial Accounting
ISBN: 978-0078025549
3rd edition
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
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