U.S. GAAP v. IFRS: The Basics - Financial Executives International

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Subsequent Events Similarities Despite differences in terminology, the accounting for subsequent events under SAS 1 Codification of Auditing Standards and Procedures and IAS 10 Events after the Balance Sheet Date is largely similar. An event that occurs after the balance sheet date but before the financial statements have been issued that provides additional evidence about conditions existing at the balance sheet date usually results in an adjustment to the financial statements. If the event occurring after the balance sheet date but before the financial statements are issued relates to conditions that arose subsequent to the balance sheet date, the financial statements are not adjusted, but disclosure may be necessary in order to keep the financial statements from being misleading. Significant Differences Stock dividends declared after balance sheet date Short-term loans refinanced with long-term loans after balance sheet date Convergence U.S. GAAP IFRS SEC staff pronouncements require financial statements to be adjusted for a stock dividend declared after the balance sheet date. Short-term loans are classified as long-term if the entity intends to refinance the loan on a long-term basis and, prior to issuing the financial statements, the entity can demonstrate an ability to refinance the loan. 40 u.s. gaaP v. iFrs: t h E Basics Financial statements are not adjusted for a stock dividend declared after the balance sheet date. Short–term loans refinanced after the balance sheet date may qualify for disclosure, but would not result in reclassification of the loan to long-term liabilities. The FASB has a convergence project on its agenda that would establish standards of accounting for subsequent events that essentially incorporate the requirements of SAS 1. The project also considers whether certain minor differences between U.S. GAAP and IAS 10 (but not the differences related to whether subsequent events affect the classification of loans) could be eliminated or minimized. The FASB issued an exposure draft in 200 .
Related Parties Similarities Both FAS 57 and IAS 24 (both entitled Related Party Disclosures) have a similar reporting objective: to make financial statement users aware of the effect of related party transactions on the financial statements. The related party definitions are broadly similar, and both standards require that the nature of the relationship, a description of the transaction, and the amounts involved (including outstanding balances) be disclosed for related party transactions. Neither standard contains any measurement or recognition requirements for related party transactions. FAS 57 does not require disclosure of compensation of key management personnel as IAS 24 does, but the financial statement disclosure requirements of IAS 24 are similar to those required by the SEC outside the financial statements. Significant Differences and Convergence There are no significant differences between the two standards, nor are there any convergence initiatives. 41
Page 1: F a L L 2007 U.S. GAAP v. IFRS: The
Page 4 and 5: Introduction It is not surprising t
Page 6 and 7: Financial Statement Presentation Si
Page 8 and 9: Consolidations, Joint Venture Accou
Page 10 and 11: Business Combinations Similarities
Page 12 and 13: Acquisition of minority interest Co
Page 14 and 15: Intangible Assets Similarities The
Page 16 and 17: Long-Lived Assets Similarities Alth
Page 18 and 19: U.S. GAAP IFRS Investment property
Page 20 and 21: Impairment loss calculation — goo
Page 22 and 23: Significant Differences Lease of la
Page 24 and 25: Debt vs. equity classification Comp
Page 26 and 27: Foreign Currency Matters Similariti
Page 28 and 29: Income Taxes Similarities FAS 109 A
Page 30 and 31: Provisions and Contingencies Simila
Page 32 and 33: Revenue Recognition Similarities Re
Page 34 and 35: Share-Based Payments Similarities T
Page 36 and 37: Employee Benefits Other Than Share-
Page 38 and 39: Segment Reporting Similarities Curr
Page 40 and 41: Earnings Per Share Similarities Ent
Page 44 and 45: Appendix — The Evolution of IFRS
Page 46 and 47: a P P E n d i x — t h E Evo L u t
Page 48: This publication contains informati

U.S. GAAP v. IFRS: The Basics - Financial Executives International

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