IFRS Differences Flashcards
GAAP: Requirements for comparative information (FS Presentation)
No specific requirement regarding comparative information.
IFRS: Requirement for comparative information (FS Presentation)
Requires comparative information for prior year.
GAAP: Comprehensive Income presentation
CI may be presented as stand-alone statement OR at the bottom of the IS and changes in equity may be presented in the notes.
IFRS: Comprehensive Income presentation
Requires EITHER a separate statement of CI and statement of changes in equity OR a single statement of profit or loss and CI.
GAAP: Extraordinary items presentation
Presentation of certain items as extraordinary is required.
IFRS: Extraordinary items presentation
Extraordinary items are not allowed.
GAAP: Deferred Taxes classification
Deferred taxes are classified as current OR non-current in the BS based on the nature of the related asset.
IFRS: Deferred Taxes classification
Deferred taxes must be classified as non-current in the BS.
GAAP: Subsequent Events evaluation
Subsequent events evaluated through the FS issuance date.
IFRS: Subsequent Events evaluation
Subsequent events evaluated through FS authorization to be issued date.
GAAP: Construction contracts accounting (Rev. Recog.)
Construction contracts are accounted for using the percentage-of-completion method if certain criteria are met. Otherwise, the competed-contract method is used.
IFRS: Construction contracts accounting (Rev. Recog.)
Construction contracts are accounted for using the percentage-of-completion method if certain criteria are met. Otherwise, revenue recognition is limited to the costs incurred. The completed-contract method is not allowed.
GAAP: Consolidating Subsidiaries exemption?
No exemption from consolidating subsidiaries in general-purpose FS.
IFRS: Consolidating Subsidiaries exemption?
Under certain restrictive situations a subsidiary (normally required to be consolidated) may be exempt form the requirement.
GAAP: Non-controlling Interest measurement
Non-controlling interest measured at fair value including goodwill.
IFRS: Non-controlling Interest measurement
Non-controlling interest may be measured EITHER at fair value including goodwill OR the proportionate share of the value of the identifiable assets and liabilities to the acquiree excluding goodwill.
GAAP: Fair Value Option for equity method investments and joint ventures
Allowed.
IFRS: Fair Value Option for method equity method investments and joint ventures
Prohibited.
GAAP: Short-term obligations expected to be refinanced (Monetary Current Assets and Current Liabs.)
Can be classified as non-current if the entity has the intent AND ability to refinance.
IFRS: Short-term obligations expected to be refinanced (Monetary Current Assets and Current Liabs.)
Can be classified as non-current only if the entity has entered into an agreement to refinance prior to the BS date.
GAAP: Contingencies that are probable (Monetary Current Assets and Current Liabs.)
Probable ( > = 70%) AND can be reasonably estimated.
IFRS: Contingencies that are probable (Monetary Current Assets and Current Liabs.)
Probable ( > = 50%) AND measurable considered provisions and accrued.
GAAP: Contingencies accrual (Monetary Current Assets and Current Liabs.)
Accrue minimum in a range if not amount is more likely that another.
IFRS: Contingencies accrual (Monetary Current Assets and Current Liabs.)
Accrue the midpoint in a range if no amount is more likely than another.
GAAP: LIFO Cost-Flow assumption
An acceptable method.
IFRS: LIFO Cost-Flow assumption
Is not allowed.
GAAP: Inventory valuation
Inventories are valued at lower of cost of market (between a floor and ceiling).
IFRS: Inventory valuation
Inventories are valued at lower of cost or net realizable value.
GAAP: Impairment loss reversal (Inventory)
Amy impairment write-downs create a new cost basis; previously recognized impairment losses are NOT reversed.
IFRS: Impairment loss reversal (Inventory)
Previously recognized impairment losses are reversed.
GAAP: Revaluation of assets (Fixed Assets)
Revaluation not permitted.
IFRS: Revaluation of assets (Fixed Assets)
Revaluation of assets is permitted as an election for an entire class of assets but must be done consistently.
GAAP: Accounting for investment property (Fixed Assets)
No separate accounting for investment property.
IFRS: Accounting for investment property (Fixed Assets)
Separate accounting is prescribed for investment property versus property, plant, and equipment.
GAAP: Investment property valuation
Unless the assets are “held for sale” they are valued using the cost model.
IFRS: Investment property valuation
Investment property may be measured at fair value.
GAAP: Allowable borrowing cost capitalization calculation
Calculated using a weighted-average accumulated expenditure times a borrowing rate.
IFRS: Allowable borrowing cost capitalization calculation
Calculated using actual borrowing costs less any earnings on investments of the borrowing.
GAAP: Biological assets categorization (Fixed Assets)
Biological assets are NOT a separate category.
IFRS: Biological assets categorization (Fixed Assets)
Biological assets are a separate category and not included in property, plant, and equipment.
GAAP: Separate components accounting (Fixed Assets)
There is no requirement to account for separate components for an asset.
IFRS: Separate components accounting (Fixed Assets)
If the major components of an asset ave significantly different patterns of consumption or economic benefits, the entity must allocate the costs to the major components and depreciate them separately.
GAAP: Impairment approach steps (Fixed Assets)
Two-step impairment approach
IFRS: Impairment approach steps (Fixed Assets)
One-step impairment approach
GAAP: Impairment is a function of (Fixed Assets)
Fair value and carrying value.
IFRS: Impairment is a function of (Fixed Assets)
The recoverable amount and carrying value.
GAAP: Impairment losses (Fixed Assets)
Impairment losses are not reversed.
IFRS: Impairment losses (Fixed Assets)
Impairment losses may be reversed in future periods.
GAAP: Developments costs (Intangible Assets)
Unless specific ASC guidance exists (e.g., software), development costs are expensed.
IFRS: Development costs (Intangible Assets)
Development costs may be capitalized if specific criteria are met.
GAAP: Revaluation of intangible assets
Not permitted.
IFRS: Revaluation of intangible assets
Revaluation of intangible assets OTHER than goodwill is permitted although uncommon,
GAAP: Goodwill impairment (Intangible Assets)
Goodwill impairment may be qualitatively assessed to determine if two-step impairment test is necessary.
IFRS: Goodwill impairment (Intangible Assets)
One-step impairment test for goodwill must be performed.
GAAP: Impairment loss (Intangible assets) is a function of…
A function of carrying value and fair value.
IFRS: Impairment loss (Intangible assets) is a function of…
A function of carrying value and the recoverable amount.
GAAP: Impairment losses (Intangible assets) reversal
Not reversed.
IFRS: Impairment losses (Intangible assets) reversal
Impairment losses, except those related to goodwill, may be reversed.
GAAP: Compound financial interests separation (Financial Investments)
Compound (hybrid) financial instruments are not split into debt and equity components unless certain requirements are met, but they may be bifurcated into debt and derivative components.
IFRS: Compound financial interests separation (Financial Investments)
Compound financial interests (e.g., convertible bonds) are split into debt, equity and, if applicable, derivative components.
GAAP: Impairment loss (Financial investments)
Declines in fair value below cost may result in impairment loss solely based on a change in interest rate unless entity has the ability and intent to hold the debt till maturity.
IFRS: Impairment loss (Financial investments)
Generally, only evidence of a credit default result sin impairment loss for an available-for-sale debt instrument.
GAAP: Impairment loss (Financial investments) reversal
When impairment is recognized through the IS, a new cost basis is established and such losses cannot be reversed.
IFRS: Impairment loss (Financial investments) reversal
Impairment losses in available-for-sale investments may be reversed in future period.
GAAP: Loans and Receivables (Financial Investments)
Unless the fair value option is elected, loans and receivables are classified as EITHER (1) held for investment, which is measured at amortized costs, or (2) held for sale, which is measured at lower of cost or fair value.
IFRS: Loans and Receivables (Financial Investments)
Loans and receivables are measured at amortized cost unless classified into the Fair Value Through Profit or Loss category or the Available-for-Sale category, both of which are carried at fair value.
GAAP: Impairment losses related to AFS securities
Impairment losses related to AFS securities are recognized in the IS and cannot be reversed.
IFRS: Impairment losses related to AFS securites
Impairment losses for AFS securities are recognized in the statement of OCI and may be reversed.
GAAP: Operating leased assets on the BS
Operating leased assets are never recorded on the BS.
IFRS: Operating leased assets on the BS
Assets held by lessee under operating leases may be capitalized on the BS if they meet certain requirements.
GAAP: Lease for Land and Building
A lease for land and building that transfers ownership to the lessee or contains a bargain purchase option would be classified as a capital lease regardless of the relative value of the land. If the fair value of the land at inception represents 25% or more of the total fair value, the lessee must consider the components separately when evaluation the lease.
IFRS: Lease for Land and Buidling
When land and buildings are leased, elements of the lease are considered separately when evaluating the lease unless the amount for land is immaterial.
GAAP: Actuarial gains and losses recognition (Pensions)
Through the corridor approach OR recognized as they occur.
IFRS: Actuarial gains and losses recognition (Pensions)
Recognized in OCI immediately.
GAAP: Prior Service Cost recognition (Pensions)
Prior service cost is initially deferred in OCI and recognized using the future years of service method or average remaining service period method.
IFRS: Prior Service Cost recognition (Pensions)
Prior service cost is recognized immediately in income.
GAAP: Deferred Tax Assets recognition (Income Taxes)
Recognized in full but valuation allowances reduce them to the amount that is more likely than not to be realized.
IFRS: Deferred Tax Assets recognition (Income Taxes)
Recognized only to the extent it is probably that they will be realized.
