IFRS vs UK GAAP

Question 0

Assets held for sale

Answer 0

IFRS - IFRS 5
when criteria are met, NCA HFS is categorised as separate line and no longer depreciated.

UK GAAP
No HFS, continue to depreciate until sold

Question 1

Discontinued Operations

Answer 1

IFRS - IFRS 5
Discontinued operations are shown as one line in the P&L

UK GAAP - CA06
shown in separate column in the income statement

Question 2

Borrowing costs

Answer 2

IFRS - IAS 5
Eligible borrowing costs must be capitalised

UK GAAP - FRS102
there is a choice of whether or not to capitalise borrowing costs

Question 3

Development costs

Answer 3

IFRS - IAS 38
when criteria are met, must be capitalised

UK GAAP
There is a choice to capitalise or expense

Question 4

Useful lives of intangibles

Answer 4

IFRS - IAS 38
Can have indefinite UEL

UK GAAP
All intangibles have finite UEL, with a rebuttals presumption that this does not exceed 5 years.

Question 5

Capital grants

Answer 5

IFRS - IAS 20
Choice if using “netting off” or “deferred income” methods.

UK GAAP - FRS102
Can only use deferred income method

Question 6

Goodwill

Answer 6

IFRS - IFRS 3

• Goodwill is not amortised but tested annually for impairment.
• Impairment reversals not allowed for goodwill
• Gain on bargain purchase is recognised through the P&L

UK GAAP

• Goodwill amortised over UEL (5 yr rebuttals presumption).
• Impairment reversals allowed for GW
• Negative GW is shown separately in the asset section if SFP and amortised.

Question 7

Acquisition costs

Answer 7

IFRS - IFRS 3
Expensed through the P&L

UK GAAP
Added to consideration

Question 8

NCI

Answer 8

IFRS - IFRS 3
Choice of FV method or proportionate method.

UK GAAP
Only proportionate method.