Question

Both U.S. GAAP and IFRS require disclosure of judgments and estimates that mgmt. has made in the process of applying accounting policies and that have a significant effect on the FS.

A. True
B. False

Answer 1

Both U.S. GAAP and IFRS require entities to disclose significant management judgments and estimates in financial statement preparation, which is indeed true.

Step-by-step explanation:

The statement is true. Both U.S. GAAP (Generally Accepted Accounting Principles) and IFRS (International Financial Reporting Standards) require entities to disclose the judgments and estimates that management has made during the application of accounting policies that have a significant effect on the financial statements. This disclosure is critical because it provides users of the financial statements with insight into the decision-making process behind the numbers, offering a better understanding of the financial position and performance of the company.