IFRS-US GAAP

1、IASB - IFRSFASB - US GAAPIncome statement and other comprh income分或合I/S can be combines with OCI as a single statement of comprh income. Or separately.分开Comprh在equity中Firms can choose to report comprh income in the statement of SHs E.Internal control (managements responsibility)N/AAuditor must expre

2、ss opinion on firms internal controls, either separately, or as the fourth element of the standard opinion.Financial statement preparNo specified orderCurrent must come before noncurrent.Financial statement elementsAssets, Liabs, Equity, Inc, ExpAssets, Liabs, Equity, Rev, ExpElements related to per

3、formanceInc and ExpRev, Exp, G, L, Comprh incDefinition of AssetResource from which a future economic benefit is expected to flowA future economic benefit. Probable, for both assets and liabs.Upward valuationAllowedMostly not allowed.Standard setting approachesLargely principles-based (relies on a b

4、road framework)Traditionally rules-based (give specific guidance), but moving toward objectives-oriented approachRevenue recognitionGoods: risk and reward of ownership is transferred; no continuing control or management; revenue and cost can be reliably measured; probable flow of economic benefitsSe

5、rvices: amount of rev, stage of completion, and cost incurred and cost of completion can be reliably measured; probable flow of economic benefitsWhen it is realized or realizable, and earned.Additional guidance by SEC: evidence of arrangement between buyer and seller; product can be delivered or ser

6、vice can be rendered; price is determined or determinable; seller is reasonably sure of collecting moneyRev rec for L-T contrOutcome reliably estimatedPercentage-of-completionPercentage-of-completion (aggressive)Outcome cannot be reliably measuredCompleted-contractRev rec = contract cost Costs expen

7、sed when incurredProf rec only at completionRev, exp, and prof are recog only at completionLoss is expectedImmediately recedImmediately recedInstallment salesCollectability is certainDiscounted PV of installment payment rec at time of sale. Difference between installment payments and discounted PV i

8、s reced as interest over timePercentage-of-completionCollectability cannot be reasonably estimatedCost recovery methodInstallment method (aggressive)Profit for period = Collected cash * Profit as a % of sales (receive cash)Collectability highly uncertainCost recovery method (sales recoged when cash

9、is received)Barter transactionsBased on fair value of rev from similar non-barter transactions with unrelated partiesRec as fair value only if has historically received cash payments for such G&S, use this historical experience to determine fair value. Otherwise, rec at carrying value of asset s

10、urrendered.Gross rev reportingNot mentionedFirm must: be the primary selling agent; bear inventory and credit risk; have control over supply and priceInventory exp rec(cost flow method)Cost flow formulaFIFOCost flow assumptionFIFO or LIFO (LIFO more popular, lower inc tax in inflationary environment

11、)Extraordinary items (unusual + infrequent)Not allowed.Net of tax, reported separately after income from continuing operations.LIFO change to other methodsRetrospective applicationCarrying value of inventory as the first LIFO layerReport certain long-lived assetsAt fair value rather than historical

12、costLiquidity-based format of B/SAllowed if the presentation is more relevant and reliableReport inventoryMin (cost, net realizable value)Min (cost, market)MarketNRV - normal prof margin, NRVInventory write downWhen NRV < carrying value of inv (orig cost of inventory B/S)Loss recoged in I/SWhen m

13、arket < carrying value, write down to market on B/S, loss on I/S, market value becomes new cost basisInventory write up (recovery of write down)Allowed, gain rec in I/S by reducing COGS by recovery #Not allowed, reported as higher profit when inventory is sold.Long-lived assetsCost or revaluation

14、 (fair value with existing active market)Cost modelReport PP&ECost or revaluation modelAllow impairment recovery(fv= E, may record in I/S)Cost modelInvestment propertyCost model or fair value model (fv record in I/S)Not specific definition for investment propertyImpairment occurCarrying value &g

15、t; recoverable amountCarrying value > As future undiscounted CFImpairment lossLoss = carrying value recoverable amountRecoveries.Loss = carrying value fair value (or discounted future CF if fair value not have)NO recoveryPurchased identifiable intangiblesCost model; revaluation model only if acti

16、ve market for the asset existsOnly cost modelInternally created intangible As (R&D)Research: expense Development: can capitalizeExpensed as incurredSoftware development costCan capitalize.Criteria: can complete A, intends to use/sell the A.Capitalize for own-use.Expense for others. After technol

17、ogical feasibility is established, capitalize.Dividends & interestsI & D received: either op or invI & D paid: either op or finD received, I received & paid: operating CFD paid: financing CFIncome taxes paidOp act unless the exp is associated with inv or fin transAll reported as oper

18、ating activitiesDirect method disclosure requireNot requiredDisclose adjustments necessary to reconcile NI to CF from operating activitiesI & T expenseDisclosed separately in CF stat under either methodEither separately in CF stat or disclosed in the footnotesIncome earned by temporarily investi

19、ng borrowed fundsReduce capitalized interestN/AFCFFNot necessary to adjust for I exp (included as fin act).If D paid is reported as op act, add D paid back to CFO.FCFE & Cash flow per shareIf CFO has already subtracted D, add D back to CFOComponent depRequiredAllowed, but seldom usedDisclosures

20、required for PP&EBasis for measurement (historical cost usually). Useful lives or depreciation rate. Carrying value and accumulated depreciation. Reconciliation of carrying amounts from the bgn of period to the end of period. Title restrictions and assets pledged as collateral. Agreements to acq

21、uire PP&E in the future.If revaluation model used, must disclose: Revaluation date. How fair value was determined. Carrying value using the historical cost model.Depreciation expense by period. Balances of major classes of assets by nature and function. Accumulated depreciation by major classes

22、or in total. General description of depreciation methods used.Disclosures required for intangible assetsSimilar to those for PP&E, firm must disclose whether the useful lives are finite or indefinite.Similar to those for PP&E, must provide an estimate of amortization expense for the next 5 y

23、ears.Disclosures required for impaired assetsAmounts of impairment losses and reversals by asset class. Where the losses and loss reversals are recognized in the I/S. Circumstances that caused the impairment loss or reversal.Amount of loss. Where the loss is recognized in the I/S. A description of t

24、he impaired asset. Circumstances that caused the impairment. How fair value was determined. Amortizing a discount or premEffective interest rate methodEffective interest rate method (preferred) or Straight-line methodBonds issuance costsInitial bond L on B/S is reduced by issuance cost, increase eff

25、ective interest rateCapitalized as an asset (deferred charge), amortized to I/S as expenseG/L from redeeming debtNo write off needed, costs are included in BV of bond liabilityWriting off remaining unamortized cost of issuing the bond reduces gain or increase loss.Finance leaseDetermined by the econ

26、omic substance of the transactionMore specific than under IFRS: bargain purchase option; >75% assets economic life; >90% fair valueSales type: PV of lease payment > carrying value of assetsDirect financing type: PV lease pay=cv of AChange in a net pension A or LI/S: Service costs and past s

27、ervice costs; int income/expB/S (E): remeasurements: actuarial G/L ; act Rexpected RI/S: service cost; int exp; expct R on plan AB/S: past service costs; act G/L, amortizedUnrealized G/L on ava-for-sale debt securities result from ex rate changeG/L recorded on I/SNot recorded as income. Subtracted (

28、add) G (L) from NI from IFRSTax accounting differencesRevaluation of fixed A and intan ADeferred A are rec in ENot allowedUndistributed prof from invest in a subDeferred taxed rec UNLESS parent can control distribution of prof and probably the temporary difference will not reverseNo def tax for fore

29、ign subs that meet indefinite reversal criteria in a JVNo def tax for domestic sub if amounts are tax free in an associate firmDef tax rec from temporary differences.DTA recognitionRec if “probable” that sufficient taxable profit will be available to recover the tax assetRec in full then reduce if “

30、more likely than not” some or all of the tax asset will not be realizedTax rate to measure deferred taxesEnacted or substantially enacted tax rateEnacted tax rate onlyPresenting deferred taxed on B/SNetted, noncurrentCurrent or noncurrent based on underlying A or LCarrying value = value recorded on

31、B/SDepreciated cost = original (historical) cost acc depreciation & impairmentCost model Amortized cost = Historical cost (accumulated depreciation + amort + depletion + impairment loss)Historical cost = Purchase price + cost necessary to get A ready to use (eg delivery and installment costs)Rev

32、aluation model fair value accumulated depreciationRecoverable amount = Max (fair value selling costs, value in use)Value in use = discounted future CFNet realizable value = Selling price completion costs and disposal costsMarket = replacement costl FASB and many other standards are working toward convergence with IFRS. Firms list shares in USA but do not use GAAP or IFRS are required to reconcile their fin stats with GAAP. IFRS firms in USA are not required for reconciliation. 国际的不需按本地改Regulatory authority: SE