IFRS vs GAAP Flashcards
IFRS requirements for construction contracts revenue recognition
Only % of completion method is allowed. Cost incurred to date vs total estimated costs
What is the purpose of reporting net income?
To summarize all changes in equity from non owner”s source
Cash Flow IFRS more flexible it can be Operating or:
Paid-Finance
Received-Investment
Cash Flow Finance:
- Interest Paid
- Dividends Paid
Cash Flow Investment:
- Interest received
- Dividends received
-Taxes can be Fin or Inv if belongs to them
Cash Flow GAAP
Operating-interest received, paid, dividends received, taxes
Financing-Dividends paid
Net Cash Provided by operating Activities
Net Income \+Depreciation -Equity earnings unconsolidated -Gain on Sale -AR grow \+Inventory increase (sale) \+AP grow (money borrowed) \+Minority interest in Net Income \+Goodwill impairment \+Deferred Tax -Mkt Securities Debt Decreased
Inventory GAAP
Lower of cost or market. Take middle.
Ceiling NRV (Selling Price-Cost to sell)
Middle
Floor NRV-Profit
Inventory IFRS
Lower of Cost or Net Realizable Value (Selling Price- Cost to sell)
LIFO
Not permitted under IFRS
Service cost for Company pension plan is not a part of OCI it is Expense
Not a PUFIER (Pension adj)
IFRS PP&E
Revaluation loss-Income statement
Revaluation gain-OCI PUFIER
Losses and gains in subsequent years should offset prior period loss/gain
Gain goes to IS if there is prior year loss
Loss goes to ICI if there was a gain in prior period
Component depreciation is
Required under IFRS
Lifo is prohibited under IFRS
Lifo is allowed under GAAP
Required disclosure under IFRS only
Statement of compliance with accounting principles
Judgements made in preparation of financial statements
When Price increase
LIFO Last in First out will give the lowest ending inventory
Nonmonetary exchange lack of commercial substance
No gain/loss recognized. If boot received, proportional gain recognized
