mouse123

There was an error in the answer choices on that question,  you can check the erata page on top of the mock exam link. It should have been written as such:
A. .3 lower
B. the same
C. .3 higher
with the correct answer being A. .3 lower
I don’t believe your reasoning is correct however. With GAAP, you will write down .5M, which increases COGS by .5M. With IFRS, you write down .2M so your COGS is increased by .2M. That means that under IFRS, COGS is .3 lower than with GAAP. Someone correct me if I’m wrong.