Comparison between U.S. GAAP and International ... - Grant Thornton
Comparison between U.S. GAAP and International ... - Grant Thornton
Comparison between U.S. GAAP and International ... - Grant Thornton
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<strong>Comparison</strong> <strong>between</strong> U.S. <strong>GAAP</strong> <strong>and</strong> <strong>International</strong> Financial Reporting St<strong>and</strong>ards 115<br />
IFRS<br />
clarifies that the guidance for the replacement of<br />
unexpired awards is the same for awards that are<br />
replaced voluntarily by the acquirer <strong>and</strong> those that<br />
the acquirer is obliged to replace. The amendment<br />
is effective for annual periods beginning on or after<br />
1 July 2010.<br />
• Assets held for sale shall be measured in<br />
accordance with IFRS 5 at fair value, less cost to<br />
sell (IFRS 3.31).<br />
Note: To the extent that other IFRS <strong>and</strong> U.S. <strong>GAAP</strong><br />
apply to the recognition, classification, <strong>and</strong><br />
measurement of certain identifiable assets <strong>and</strong> liabilities<br />
assumed in a business combination, differences in<br />
existing guidance might result in differences in the<br />
amounts recognised in a business combination as well<br />
as the subsequent accounting for these items.<br />
U.S. <strong>GAAP</strong><br />
• Assets held for sale shall be measured in accordance<br />
ASC 360 at fair value, less cost to sell<br />
(ASC 805-20-30-22).<br />
Goodwill or gain on a bargain purchase<br />
The acquirer measures <strong>and</strong> recognises either goodwill<br />
or a gain on a bargain purchase as a residual amount,<br />
which is the difference <strong>between</strong> the following<br />
(IFRS 3.32):<br />
• The total acquisition-date value of the acquiree (see<br />
below), <strong>and</strong><br />
• The net of the acquisition-date amounts of the<br />
identifiable assets acquired <strong>and</strong> liabilities assumed<br />
in the combination, measured <strong>and</strong> recognised<br />
according to the provisions of IFRS 3<br />
Goodwill is not amortised. Instead, it is tested for<br />
impairment annually or more frequently if indications of<br />
impairment exist. See Section 4.4, “Impairment” for a<br />
discussion of the goodwill impairment test.<br />
A bargain purchase is defined as a business<br />
combination in which (a) the net of the acquisition-date<br />
amounts of the identifiable assets acquired <strong>and</strong> liabilities<br />
assumed in the combination, measured <strong>and</strong> recognised<br />
according to the provisions of IFRS 3, exceeds (b) the<br />
total acquisition-date value of the acquiree (IFRS 3.34).<br />
Acquisition-date value of the acquiree equals the sum of<br />
the following (IFRS 3.32):<br />
• The acquisition-date value of consideration<br />
transferred by the acquirer (generally fair value, but<br />
see below)<br />
• The acquisition-date fair value of any equity<br />
interests in the acquiree held by the acquirer<br />
immediately before the acquisition<br />
• The amount of any noncontrolling interests<br />
The acquirer measures <strong>and</strong> recognizes either goodwill or<br />
a gain on a bargain purchase as a residual amount, which<br />
is the difference <strong>between</strong> the following<br />
(ASC 805-30-30-1):<br />
• The total acquisition-date value of the acquiree (see<br />
below), <strong>and</strong><br />
• The net of the acquisition-date amounts of the<br />
identifiable assets acquired <strong>and</strong> liabilities assumed in<br />
the combination, measured <strong>and</strong> recognized<br />
according to the provisions of ASC 805<br />
Similar to IFRS, goodwill is not amortized. See<br />
Section 4.4, “Impairment” for a discussion of the goodwill<br />
impairment test.<br />
Similar to IFRS (ASC 805-30-25-2 through 25-4).<br />
Acquisition-date value of the acquiree equals the sum of<br />
the following (ASC 805-30-30-1):<br />
• The acquisition-date value of consideration<br />
transferred by the acquirer (generally fair value, but<br />
see below)<br />
• The acquisition-date fair value of any equity interests<br />
in the acquiree held by the acquirer immediately<br />
before the acquisition<br />
• The acquisition-date fair value of any noncontrolling<br />
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