IFRS Consolidations

Question 1

Difference between control:

Answer 1

GAAP: Control is anything over 50%

IFRS: Control can be obtained with less than 50% in certain circumstances (i.e. potential rights or decision making)

Question 2

Differences in VIEs:

Answer 2

IFRS refers to VIES as special purpose entities

Question 3

Differences in accounting policies:

Answer 3

Accounting policies of P and S have to align under IFRS

US GAPP: They do not have to align

Question 4

Accounting periods:

Answer 4

Accounting periods can be three months apart under US GAAP. IFRS requires that the end date has to be the same.

Question 5

Goodwill allocation to noncontrolling interest (Most important difference to remember)

Answer 5

Goodwill is allocated to noncontrolling interest under IFRS

Goodwill does not have to be allocated to NCI