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

Comparison between U.S. GAAP and International Financial Reporting Standards 122
IFRS
U.S. GAAP
• A transaction with an investee (including a joint
venture investee) that is accounted for as a change
in ownership transaction in accordance with
ASC 810-10-45-21A through 45-24
Application of the equity method – loss of significant influence
An investor shall discontinue the use of the equity method
when it no longer has significant influence over the
associate. From that date, an investor shall account for its
investment in accordance with IAS 39. On the date
significant influence is lost, the investor shall measure its
retained investment at fair value and recognise in profit or
loss any difference between the following:
• The fair value of the retained investment and any
proceeds from disposing of part of its interest, and
• The carrying amount of the investment at the date
when significant influence is lost (IAS 28.18)
• Account for all amounts recognised in other
comprehensive income in relation to that associate
on the same basis as would be required if the
associate had directly disposed the related assets
and liabilities (IAS 28.19A)
An investor shall discontinue the use of the equity
method when it no longer has significant influence over
the investee. From that date, an investor shall account
for its investment under other applicable accounting
literature, such as ASC 320 (ASC 323-10-35-36).
Presentation and disclosure
An investor’s financial statements shall be prepared using
uniform accounting policies for like transactions and
events. Therefore, adjustments shall be made to conform
the associate’s accounting policies to those of the investor
(IAS 28.26-.27).
Investments in associates shall be classified as a
non-current asset and the carrying amount shall be
disclosed separately (IAS 28.38).
The investor's share of the associate's profit or loss shall
be shown separately in the consolidated income
statement (IAS 1.82c). Any discontinued operations of the
associate shall be separately disclosed (IAS 28.38).
The investor's share of changes recognised in other
comprehensive income by the associate shall be
recognised in other comprehensive income by the
investor (IAS 28.39).
Disclosures include summarised financial information of
associates, such as the aggregated amounts of assets,
Unlike IFRS, there is no explicit requirement for an
investor to use uniform accounting policies for like
transactions and events.
Equity method investments shall be displayed as a
separate item in the consolidated balance sheet
(ASC 323-10-45-1).
The investor's share of the earnings or losses of an
equity method investee should normally be shown in
the income statement as a single amount except for the
separate presentation of any extraordinary items of the
investee, if material (ASC 323-10-45-1 through 45-2).
Unlike IFRS, an investor is not required to separately
disclose or display the discontinued operations of an
equity method investee.
An investor shall record its proportionate share of the
investee’s equity adjustments for other comprehensive
income as increases or decreases to the investment
account with corresponding adjustments in equity
(ASC 323-10-35-18).
Similar to IFRS, disclosures for material equity method
investees include summarized financial information for
assets, liabilities, and results of operations of the
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