Case 3-5: International versus U.S. Standards in Ch. 3 ofFinancial Accounting Theory and Analysis Case 3-5 Internationalversus U.S. Standards Under U.S. GAAP, property, plant, andequipment are reported at historical cost net of accumulateddepreciation. These assets are written down to fair value when itis determined that they have been impaired. A number of othercountries, including Australia, Brazil, England, Mexico, andSingapore, permit the revaluation of property, plant, and equipmentto their current cost as of the balance sheet date. The primaryargument favoring revaluation is that the historical cost of assetspurchased ten, twenty, or more years ago is not meaningful. Aprimary argument against revaluation is the lack of objectivity inarriving at current cost estimates, particularly for old assetsthat either will or cannot be replaced with similar assets or forwhich no comparable or similar assets are currently available forpurchase. Required: a. Discuss the qualitative concept ofcomparability. In your opinion, would the financial statements ofcompanies operating in one of the foreign countries listed above becomparable to a U.S. company�s financial statements?Explain.
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