IFRS VS UK GAAP Flashcards
Discontinued operations
IFRS
- discontinued operations are show on a single line
- assets held for sale are seperate within current assets
- depreciation stops at the date the asset is held for sale
UK GAAP
- discontinued operations are shows as a separate column
- there is no category of assets held for sale within fixed assets
- depreciation continues until the date of sale
Leases
IFRS
- all leased assets are categorised as a right of use asset
- leases of short life or low value are charged to the SPL on a straight line basis
UK GAAP
- distinction made between operating and a finance lease
- finance leases, all risk and rewards transferred are treated as right of use assets
- operating leases are charged to the SPL
borrowing costs and government grants
IFRS
- capital grants - choice of netting off or deferred income method
- borrowing costs must be capitalised
UK GAAP
- only allowed the deferred income method
- borrowing costs - choice to capitalise or expense them
Intangibles - amortisation v impairment, R&D
IFRS
- intangibles can have an indefinite useful life
- when the criteria is met, development costs MUST be capitalised
UK GAAP
- all intangibles have a finite useful life and are amortised
- there is an assumption that this is a 10 years maximum
- there is a choice over whether to capitalise or expense
Goodwill
IFRS
- goodwill is not amortised but tested annually for impairment
- impairment reversal not allowed
- negative goodwill is not allowed, must be a gain on bargain through P&L
- acquisition costs - expensed
UK GAAP
- goodwill is amortised (over the 10 year max assumption)
- impairment reversal is allowed
- gain on bargain purchase is calculated as negative goodwill, and is shown in the assets section and may be a deduction from positive goodwill
- acquisition costs - added to goodwill
Group stuff that isnt goodwill
IFRS
- NCI - allowed a choice between FV and proportionate methid
- Associate goodwill - doesnt exist
UK GAAP
- only proportionate method is allowed
- associate goodwill - calculated and amortised added to the P&L
what is a fully substantic
