Gaap Diferences

Question 1

What’s the gaap differences in conceptual framework

Answer 1

• 10 qualities not 6
• asset def is expected economic benefits . (Not potential)

Question 2

What are the gaap differences in presentation of FS

Answer 2

• has to be prepared in accordance with companies act 2006
• allows statement of income and retained earnings in place of a SOCIE

Question 3

Gaap differences in inventories

Answer 3

• the selling price is entity specific not market

Question 4

Gaap differences in assets held for sale

Answer 4

• there is no hfs category and therefore the asset must continue to be depreciated until disposal

Question 5

Gaap difference in revenue

Answer 5

• does not have the 5 stage approach

Question 6

Gaap differences in borrowing costs

Answer 6

There is the option to capitalise or expense. (Ifrs says any eligible must be capitalised)

Question 7

Gaap differences in intangible assets

Answer 7

• choice to capitalise or expense the development costs (ifrs states if eligible it must be capitalised)
• intangibles all have a finite UL that does not exceed 10 years (ifrs can be indefinite)

Question 8

Gaap differences for capital grants

Answer 8

• has to be deferred income method (ifrs allows netting off method)

Question 9

Gaap difference of financial instruments

Answer 9

• has to be at transaction price (ifrs is at fair value)

Question 10

Gaap difference in goodwill

Answer 10

• Amortised over useful life, assumed at 10 years (ifrs states it should be tested annually)
• impairment reversal is allowed
• gain on bargain purchase is negative goodwill which is shown as an asset (ifrs is it a profit)

Question 11

Gaap differences in acquisition costs

Answer 11

• added to consideration (ifrs are expenses)

Question 12

Gaap differences on nci

Answer 12

Only proportionate method allowed

Question 13

Gaap differences on subsidiary’s

Answer 13

Can be excluded from consolidation if long term restrictions apply or if it is only intended for resale purposes

Question 14

Gaap differences on associates and joint ventures

Answer 14

Goodwill is recognised

Question 15

Gaap differences in accounting policies

Answer 15

Changes to cost model does not count as a change of policy and thus does not need a disclosure

Question 16

Gaap differences related party transactions

Answer 16

Does not need to disclose transactions if the sub is wholly owned by the parent

Question 17

Gaap differences

Answer 17

Does not need to have disclosures as long as the disclosure is part of the respective consolidated accounts

Question 18

Gaap differences leases

Answer 18

Gets rid of the short term lease ruling
Introduces;

• finance leases - all risk and reward of ownership to the party using the asset
• charge as an rou asset
• operating leases - everything else
  Charge as an expense

Question 19

Gaap differences to ppe

Answer 19

Proceeds from the process of bring the ppe to the condition necessary are deducted from the ppe carrying amount