2008 CFA Level 1 － Sample 样题(3)－Q39 principles, class, face, accounting, otherwise

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39、Assume U.S. GAAP (generally accepted accounting principles) applies unless otherwise noted.

All else equal, will a company's implementation of the accounting standard (SFAS 143) related to asset retirement obligations incurred because of environmental damage most likely increase or decrease that company's:

      return on assets? net income?

A.   Increase      Increase

B.    Increase       Decrease

C.   Decrease       Increase

D.   Decrease       Decrease

A. Answer A

B. Answer B

C. Answer C

D. Answer D

 

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答案和详解如下：

39、Correct answer is D

"Analysis of Long-Lived Assets: Part II - Analysis of Depreciation and Impairment," Gerald I. White, Ashwinpaul C. Sondhi, and Dov Fried

2008 Modular Level I, Vol. 3, p. 411

Study Session 9-37-e

discuss accounting requirements related to remedying environmental damage caused by operating assets, and explain the financial statement impact and ratio effects that result from the application of those requirements

Implementation of SFAS 143 requires that companies record an asset and related liability for costs involved in the remedy of environmental damage. The increase in assets will decrease return on assets and the increase in depreciation and accretion expense will reduce net income.

 

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