Question: Client X operates in the US currently and is planning to expand operations globally next year. As a result, management is considering preparing financial statements

Client X operates in the US currently and is planning to expand operations globally next year. As a result, management is considering preparing financial statements in accordance with IFRS rather than with US GAAP.

Client X contacted you for clarification and recommendations regarding the following issues:

  • How the use of the LIFO method to value its inventories will be impacted if a switch to financial statements prepared in compliance with IFRS will be made.
  • Whether interest cost on construction of a new warehouse may be included in the cost of the new warehouse.
  • In what instances should goodwill be adjusted for impairment?

Provide an overview of each issue.

.Why would werecommend the move to IFRS or the stay with GAAP.

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