IFRS Differences

Question 1

What is the seperate category under PP&E that is exclusive to IFRS?

Answer 1

Biological assets.

Question 2

How is vacation pay and sick pay reported under IFRS?

Answer 2

If they are accumulated they are required to be accrued

Question 3

When can you reclassify a short term obligation to a long term obligation under IFRS?

Answer 3

When the entity has entered into an agreement to refinance on a long term basis

Question 4

What is the difference in impairment methods between GAAP and IFRS?

Answer 4

GAAP requires a 2 step method only when impairment is suspected

IFRS requires a 1 step method at financial statement date

Question 5

What are the different methods allowed for the operating section of the statement of cash flows for IFRS?

Answer 5

Direct, indirect, and modified direct method (shows revenue, expenses, and changes in working capital accounts in operating activities)

Question 6

How are interest and dividends received reported on the statement of cash flows for IFRS?

Answer 6

As an investing activity unless lending is normal business activity

Question 7

How are impairment recoveries recognized under GAAP and IFRS?

Answer 7

GAAP does not allow impairment recoveries

IFRS allows impairment recoveries recognized in income up to the extent of losses previously recognized

Question 8

How are financial assets and liabilities recognized under IFRS?

Answer 8

Financial assets are recognized at fair value unless certain criteria is met, requiring amortized cost

Financial liabilities are recognized at fair value through profit or loss

Question 9

How is a negative cash balance reported under IFRS and GAAP?

Answer 9

It is reported as a negative cash equivalent for IFRS, a negative cash balance under GAAP

Question 10

What is a low value lease under IFRS?

Answer 10

Lease worth $5,000 or less. May be classified as short term if it contains a purchase option

Question 11

Can a lease with a purchase option be classified as short term under IFRS?

Answer 11

No, unless it falls into the “low value leases” category

Question 12

How are actuarial gains and losses recognized under GAAP and IFRS?

Answer 12

GAAP uses the corridor approach for recognized actuarial gains or losses in pension expense

IFRS recognizes acturial gains and losses immediately in OCI

Question 13

What inventory costing method does IFRS not allow?

Answer 13

LIFO is not allowed

Question 14

How are research and development costs treated under IFRS?

Answer 14

Research expense, development may be capitalized if certain criteria met

Question 15

How are all leases classified on the balance sheet under IFRS?

Answer 15

They are all finance leases

Question 16

Out of the different accounting changes, which one is not included under IFRS?

Answer 16

No provision for change in reporting entity

Question 17

When is consolidation required under IFRS?

Answer 17

When entity has control evidence by power over investee, exposure to variable returns, and power to affect returns

Question 18

How are contingent gains treated under IFRS?

Answer 18

Required to be disclosed if probable

Question 19

How is interest paid shown on the statement of cash flows for IFRS?

Answer 19

Interest paid is financing

Question 20

What model is allowed to account for intangibles under IFRS?

Answer 20

Revaluation model is allowed if fair value is reasonably estimable

Question 21

When is a consolidation reassessed under IFRS?

Answer 21

Only if there is a change in circumstances

Question 22

What is a provision under IFRS?

Answer 22

Loss that is probable and estimable, resulting from a past event

Recognized

Question 23

How is non-controlling interest recognized under IFRS?

Answer 23

Recognized at fair value or proportionate amount of net assets

Question 24

How are contingencies recognized under IFRS?

Answer 24

They are not recognized

Question 25

What are the requirements for financial statement presentation under IFRS?

Answer 25

1. Comparative financial statements required, including immediately prior period
2. Requires a seperate statement of comprehensive income and statement of changes in equity

Question 26

When are deferred tax assets recognized under IFRS?

Answer 26

When it is reasonably assured of realization