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Question:
Which of the following is most likely regarding reversals of inventory write‐downs for manufacturing companies? IFRS and U.S. GAAP
A
Permitted, but only to the extent of a previously recognized write‐down and Not permitted
explanation
For companies that are not engaged in mining or agricultural activities:
• U.S. GAAP prohibits the reversal of any inventory write‐down.
• IFRS permits a reversal to the extent of the write‐down that had been previously recorded.
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