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

Comparison between U.S. GAAP and International Financial Reporting Standards 144
IFRS
presented shall be adjusted for the effects of errors and
adjustments resulting from changes in accounting policies
accounted for retrospectively
(IAS 33.64 and IAS 8.19-.27).
An entity does not restate diluted earnings per share of
any prior period presented for changes in the assumptions
used in earnings per share calculations or for the
conversion of potential ordinary shares into ordinary
shares (IAS 33.65).
U.S. GAAP
Similar to IFRS (ASC 260-10-45-21).
10.4 Events after the reporting period
IFRS
U.S. GAAP
Relevant guidance: IAS 1, 10, and 33; IFRS 3 Relevant guidance: ASC 260, 470, 805, and 855;
EITF Topic D-86; SEC SAB Topic 4:C;
AICPA AU Section 341; Sarbanes-Oxley Act of 2002
(Section 302)
Introduction
The objective of IAS 10 is to prescribe (IAS 10.1):
• When an entity should adjust its financial statements
for events after the reporting period
• The disclosures that an entity should give about the
date when the financial statements were authorised
for issue and about events after the reporting period
Events after the reporting period are those events,
favourable and unfavourable, that occur between the end
of the reporting period and the date when the financial
statements are authorised for issue. Two types of events
can be identified (IAS 10.3):
• Those that provide evidence of conditions that
existed at the end of the reporting period (adjusting
events)
• Those that are indicative of conditions that arose after
the reporting period (non-adjusting events)
The objective of ASC 855 is to establish principles and
requirements for subsequent events. The guidance sets
forth (ASC 855-10-05-1):
• The period after the balance sheet date during
which management of a reporting entity shall
evaluate events or transactions that may occur for
potential recognition or disclosure in the financial
statements
• The circumstances under which an entity shall
recognize events or transactions that occurred after
the balance sheet date
• The disclosures that an entity shall make about
events or transactions that occurred after the
balance sheet date
Subsequent events are events or transactions that
occur after the balance sheet date but before financial
statements are issued or are available to be issued.
There are two types of subsequent events
(ASC 855-10-20-Glossary):
• Recognized subsequent events: events or
transactions that provide additional evidence about
conditions that existed at the date of the balance
sheet, including the estimates inherent in the
process of preparing financial statements
• Nonrecognized subsequent events: events that
provide evidence about conditions that did not exist
at the date of the balance sheet but arose
© 2011 Grant Thornton LLP
All rights reserved
U.S. member firm of Grant Thornton International Ltd