FAR Flashcards
Conceptual Framework
IFRS - Qualitative characteristics fundamental and enhancing
GAAP - Only one tier of qualitative characteristics
IFRS - two main measurement bases - historical cost and current value (FV/VIU/Current Cost)
GAAP - Two Measurement bases - cost and fair value
IAS 1 Primary FS
IFRS - SOCIE required
UK GAAP - only need single income statement and RE if no OCI
Terminology different
IFRS - Abnormal material items of income and expense disclosed separately, no such thing as exceptional items
UK GAAP - Extraordinary items are presented as individual items within P&L
IAS 2 - Inventory
UK GAAP - Inventories held for distribution/no nominal consideration Additional guidance provided on what included in production overheads
IFRS - No such requirement
UK GAAP - Reverse impairment losses if changes in economic circumstances which led to impairment no longer exist
IFRS - IAS 2 no such guidance
IAS 8 - Accounting Policies, changes in accounting estimates and errors
UK GAAP - Change to cost model when reliable measure of FV not available not a change in accounting policy
IFRS - No such statement
IAS 10 - Events after the reporting period
IFRS - Dividends declared after year end not recognised but disclosed in notes
UK GAAP - dividends declared after the year end are not a liability but can be presented as a separate part of equity
IAS 12 - Tax
UK GAAP - Current tax should not be discounted
IFRS - not referenced
IAS 16 - PPE
UK GAAP - Comparative information in respect of reconciliations of PPE does not have to be presented
IFRS - extensive disclosure requirements
IFRS 16 - Leases
IFRS - does not distinguish (for lessees) between finance and operating leases, requires nearly all leases recognised in SFP. Exemption for short leases/low value
UK GAAP - Distinction between finance leases (substantially all risks and rewards of ownership transferred) and operating leases (all other leases)
IFRS 5 - Discontinued operations and assets held for sale
IFRS - Discontinued operations are presented as single line in PL, analysis in note/statement of comprehensive income
UK GAAP - Presented in separate column to continuing operations
IFRS - Assets are classified as ‘held for sale if they meet criteria’
UK GAAP - no equivalent concept, continue to depreciate until sale
IFRS 15 Revenue from Contracts with customers
IFRS 15 - 5 step approach to recognition, revenue recognised when performance obligations are satisfied
UK GAAP - no five step approach, focus on issue of control (transfer risk and reward)
IAS 20 - Accounting for Government Grants and Disclosure of Government Assistance
IFRS - Grants are accounted for using capital or income approach
UK GAAP - Grant may be recognised using either performance model or accrual model, made on class by class basis
IFRS - Capital approach allows choice of deferred income or netting off
UK GAAP - under accrual model deferred income method must be used
IAS 21 - Effects of change in Foreign Exchange Rates
IFRS - Cumulative foreign exchange differences are shown as separate component of equity
UK GAAP - not required
IAS 23 - Borrowing costs
IFRS - Capitalise when criteria is met
UK GAAP - choice to capitalise or recognise expense as occurred
IAS 24 - Related Party Disclosures
IFRS - Intercompany transactions cancelled on consolidation do not need to be disclosed in group accounts
UK GAAP - No disclosure of related party transactions is required between two or members of a group as long as any subsidiary is wholly owned
IAS 38 - Intangible Assets
IFRS - Development expenditure must be capitalised when criteria are met
UK GAAP - Option to capitalise development expenditure
IFRS - Can have finite and infinite lives
UK GAAP - All IA have finite useful life, if no reliable estimate it should not exceed 10 years
IFRS - nothing
UK GAAP - IA acquired in BC not recognised when arises from legal or other contractual rights but there is no history or evidence of exchange transactions on which to base an estimated FV
IFRS - Disclosure of reconciliation of CA at beginning and end of period required when presenting comparative information
UK GAAP - Exempt if apply FRS 101
Financial Instruments
UK GAAP - Exemptions from disclosure of IFRS 7 & 13 provided disclosures in group account
IFRS - no exemption
UK GAAP - initially measured at transaction price
IFRS - initially measured at FV
UK GAAP - Subsequent measurement generally amortised cost or FV through P/L
IFRS - various categories of subsequent measurement
IAS 7 - Cash Flows
IFRS - Applies to all entities
UK GAAP - Exemption available for member of group if parent prepares publicly available consolidated FS and member is included in that consolidation
GROUPS - NCI
IFRS - NCI measured at FV or proportionate method
UK GAAP - NCI Always measured at proportionate method
GROUPS - Acquisition Cost
IFRS - Acquisition costs are expensed
UK GAAP - acquisition costs are added to the cost of investment
Groups - Contingent Consideration
IFRS - At acquisition, FV of Contingent Consideration (discount and amount) recognised as part of consideration transferred
UK GAAP - Reasonable estimate of FV of amounts payable as contingent consideration (discounted as appropriate) is added to the cost of investment at acquisition date where probably will be paid and can be measured reliably
Groups - Subsequent adjustment
IFRS - If within measurement period and result from additional information they are related back to acquisition date and increase/decrease GW. f do not meet criteria are expensed
UK GAAP - all subsequent adjustment to amount of contingent consideration related back to acquisition date increasing or decreasing goodwill
Groups - Goodwill
IFRS - Goodwill not amortised but tested annually for impairment
UK GAAP - Amortised over maximum of 10 years
Groups - Negative Goodwill
IFRS - Negative goodwill is credited to P/L as gain on bargain purchase
UK GAAP - separate item on SFP
Groups - exemption
UK GAAP - Sub excluded if long term restriction prevent control
IFRS - no exemption
Groups - GW on associate or JV
IFRS - no implicit goodwill recognised or amortised
UK GAAP - GW calculated on associate/JV and amortised
Groups - disclosure about associate/JV
IFRS - Specific disclosure about Associate and JV
UK GAAP - Less detailed information disclosed
