Ch 13 IFRS Insights Flashcards
IFRS and GAAP definition of liabilities, classification of liabilities
The same under both
Both GAAP and IFRS classify liabilities as current and
non current
IFRS presentation of current liabilities and noncurrent liabilities
Presents current liabilities in order of liquidity
Many companies present non current liabilities before
Current liabilities
IFRS VS GAAP: measurement of provision related to contingency
IFRS: discloses midpoint in range used to measure liability
GAAP: minimum amount in range is used
Both IFRS and GAAP prohibit…
Recognition of liabilities for future losses
IFRS VS GAAP restructuring liabity
IFRS permits recognition of restructuring liability
GAAP has additional criteria before restructuring liability
Can be established
IFRS VS GAAP asset retirement obligations
Similar, recognition of ARO is more stringent under GAAP:
ARO isn’t recognized unless there is present legal obligation
And fair value can be reasonably estimated
IFRS VS GAAP: short term obligations expected to be refinanced can be classified as non current if the refinancing is completed by…
The financial statement date under IFRS
the date the financial statements are issued under GAAP
Provisions
IFRS term for estimated liabilities
GAAP VS IFRS contingent liabilities
Not recognized in financial statements under IFRS
Sometimes recognized under GAAP
Onerous contracts
Contracts where unavoidable costs of meeting obligations
Exceed economic benefits expected to be received
Contingent asset
Asset that arises for, past events and whose existence
Will be confirmed by occurrence or non occurrence of
Uncertain future events
Virtually certain
Probability of 90% occurrence
Report as asset
Probable
51-90% probable
Disclose
Possible but not probable
5-50% chance
No disclosure required
Remote
Less than 5%
No disclosure required
