1ISTQ - Intermediate Accounting (Kieso)

Question

Question: Which of the following is not reported in an income statement under IFRS?

(a) Discontinued operations. 

(b) Extraordinary items. 

(c) Cost of goods sold. 

(d) Income tax.

Step-by-Step Solution

Answer

Option b is the correct answer.

Step 1: Meaning of IFRS

The term IFRS refers to the International Financial Reporting Standards issued by the International Accounting Standards Board for presenting a company's financial performance and position understandably. 

Step 2: Explanation for the correct option

An income statement prepared under the IFRS does not include the extraordinary items section. Also, it does not consider the other comprehensive income or loss like US GAAP does.

Step 3: Explanation for the incorrect option

An income statement format of IFRS captures mainly all the items associated with revenues and expenses. It includes income and losses from discontinued operations, the cost of goods sold, and applicable tax on the net income generated by a business entity.