Answer (D) is correct . The $10 million loss as a result of a hurricane is a material transaction that is (1) unusual in nature and (2) infrequent in occurrence in the environment in which the entity operates. Thus, under U.S.?GAAP, this loss is reported as an extraordinary item in the income statement. Under IFRS, no items are classified as extraordinary. Accordingly, this loss is reported as an other expense in the continuing operations section of the income statement.
Answer (A) is incorrect because Under IFRS, no items are classified as extraordinary.
Answer (B) is incorrect because Under U.S. GAAP, this loss is reported as an extraordinary item. It is unusual in nature and infrequent in occurrence in the environment in which the company operates.
Answer (C) is incorrect because A loss as a result of a hurricane must not be classified as an item of OCI. Instead, it must be recognized in the income statement as an extraordinary item under U.S.?GAAP or as a loss from continuing operations under IFRS.
|
