Comparison between U.S. GAAP and International ... - Grant Thornton

Comparison between U.S. GAAP and International Financial Reporting Standards 10
2. Overall financial statement presentation
Note: IFRS and U.S. GAAP provide only limited financial statement presentation guidance. In addition, presentation
guidelines in U.S. GAAP are dispersed across the standards. Moreover, users of financial statements have often
expressed dissatisfaction that information is not linked across the different statements and that dissimilar items are in
some cases aggregated in one number.
The objective of the IASB/FASB joint financial statement presentation project is to establish a global standard that will
guide the organization and presentation of information in the financial statements. The Boards’ goal is to improve the
usefulness of the financial information provided in an entity’s financial statements to assist management to better
communicate its financial information to the users of its financial statements, and to help users in their decision making.
In October 2008, the IASB and the FASB (the Boards) jointly announced the issuance of their Discussion Papers on
the presentation of financial statements. The Discussion Paper, Preliminary Views on Financial Statement
Presentation, is an analysis of current issues in financial statement presentation and proposed responses to those
issues by the Boards. The objective of the Discussion Paper is to invite comments on a new format for financial
statements designed to communicate information to users following three new principles: cohesiveness,
disaggregation, and liquidity/financial flexibility.
In July 2010, the staff of the IASB and the FASB posted on each Board’s website a Staff Draft of an exposure draft that
reflects the Boards’ cumulative tentative decisions on financial statement presentation, through their joint meeting in
April 2010. The proposals in that Staff Draft are the basis for the staff outreach activities. As noted in the introduction
and summary that accompanied the staff draft, the Boards are not formally inviting comments on the staff draft;
however, they welcome input from interested parties.
At the October 2010 IASB/FASB joint meeting, the staff updated the Boards on their outreach activities related to the
July 2010 staff draft of an exposure draft on financial statement presentation. The IASB and FASB discussed how to
proceed with the project. The Boards acknowledged that they do not have the capacity currently to devote the time
necessary to consider the information learned during outreach activities and modify their tentative decisions.
Accordingly, the Boards decided to not issue an exposure draft in the first quarter 2011 as originally planned.
The Boards will return to this project when they have the requisite capacity, which is expected to be after June 2011.
2.1 General
IFRS
Relevant guidance: IAS 1
Note 1: Additional requirements may be specified by
local statute, regulators, or stock exchanges.
Note 2: In December 2010, the IASB published an
IFRS Practice Statement, Management Commentary, a
broad, non-binding framework for the presentation of
narrative reporting to accompany financial statements
prepared in accordance with IFRS.
U.S. GAAP
Relevant guidance: Form and content specified by
GAAP as set forth in FASB Accounting Standards
Codification (ASC) 205, 220, 505 and SEC Regulation
S-X, Rules 3-01(a) and 3-02(a); SEC Regulation S-K,
Item 303.
Unlike IFRS, U.S. GAAP does not have similar
management commentary guidance. However, SEC
Regulation S-K, Item 303 requires registrants to include
management’s discussion and analysis (MD&A) of
financial condition and results of operations in their filings
with the SEC.
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