Ch 16 IFRS Insights

Question 0

IFRS VS GAAP: basic and diluted EPS

Answer 0

IFRS requires share settlement must be used

GAAP requires can settle projects with either shares or cash

Question 1

IFRS VS GAAP: Stock based compensation

Answer 1

Both follow same model for recognizing stock based
compensation

FMV of shares and options awarded to employees is recognized
Over period to which employees’ services relate

Question 2

IFRS VS GAAP: Accounting for securities with characteristics of debt and equity (convertible debt)

Answer 2

GAAP: all proceeds of convertible debt recorded as long term
Debt

IFRS: convertible bonds bifurcated into separate debt component
And equity component

Question 3

IFRS VS GAAP: Employee share purchase plans

Answer 3

IFRS: all employees share purchase plans deemed compensatory
For amount of any discount

GAAP: plans that have 5% or less discount aren’t considered
Compensatory

Question 4

IFRS VS: Modification of share option results in recognition of any incremental fair value

Answer 4

Modification leads to reduction which is not permitted by IFRS
but is permitted by GAAP

Question 5

IFRS VS GAAP: other EPS differences 2

Answer 5

1 treasury stock method and how proceeds from extinguishment
Of liability should be accounted for

2 how to compute weighted avg. contingently issuable shares