FAR IFRS vs UK GAAP

Question 1

IAS 2 Inventory

Answer 1

UK GAAP:
inv held for for distribution measured at adjusted cost
extra guidance on what should be included for o/hs
impairment losses can be reversed if changes in circumstance

IFRS:
no such requirements or guidance

Question 2

IAS 16 - PPE

Answer 2

UK GAAP:
FRS101 entities do not have to present comparative info or reconciliations on PPE

IFRS:
Extensive disclosure requirements

Question 3

IFRS 16 Leases

Answer 3

UK GAAP:
FRS makes distinction between finance leases and operating leases

IFRS:
exemptions for short leases and lease of low value
doesn’t distinguish between the types

Question 4

IFRS 15 Revenue

Answer 4

UK GAAP:
Does not have 5 step approach. Focuses on issue of control

IFRSS:
5 step . revenue recognised when PO met

Question 5

IAS 20 Grants

Answer 5

UK GAAP:
Grant recognised by either performance model or the accrual model, class by class basis 
Under accrual method the deferred income method must be used

IFRS
Grants accounted for using the netting off method or the defferred income

Question 6

IAS 21 Change in FX rates

Answer 6

IFRS requires cumulative FX as a seperate component of equity . UK gaap no requirement

Question 7

IAS 23 Borrowing costs

Answer 7

UK GAAP:
entities are allowed choice of whether to capitalise or to recognise as expense as incurred

IFRS
requires to be capitalised when criteria met

Question 8

IAS 38 Intangible Assets

Answer 8

UK GAAP:
option to capitalise development expenditure
all have finite useful life, if unknown, 10 years

IFRS:
must capitalise development expenditure
allowed either finite or infinite life
requires reconciliation of CA

Question 9

IAS 32 financial instruments

Answer 9

UK GAAP:
initial measurement at transaction price
subsequent measurement amortised cost or FV through p&l

IFRS:
measured at FV
various methods of subsequnt measurement

Question 10

Groups

Answer 10

UK GAAP:
NCI always propertionate
Aqn costs added to cost of investment
FV of contingent only if probably and measured reliably
Goodwill amortised over max of 10 years
negative goodwill is seperate item on SOFP
less detailed info disclosed
Goodwill is calculated on JV & amoritised

IFRS:
NCI either way
Aqn costs are expensed
at aqn FV of contingent consideration is recognised
Goodwill tested annually for impairment
negative goodwill = cr P&L gain on bargain
No goodwill on JVs / associates