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

Comparison between U.S. GAAP and International Financial Reporting Standards 148
IFRS
evaluated (i.e. the date that the financial statements are
authorised for issue) even if they are reissued.
Accordingly, an entity could have adjusting events in its
reissued financial statements.
U.S. GAAP
financial statements, events or transactions may have
occurred that require disclosure in the reissued financial
statements to keep them from being misleading. Unlike
IFRS, an entity shall not recognize events occurring
between the time the financial statements were issued
or available to be issued and the time the financial
statements were reissued unless the adjustment is
required by U.S. GAAP or regulatory requirements.
Similarly, an entity shall not recognize events or
transactions occurring after the financial statements
were issued or were available to be issued in financial
statements of subsequent periods unless the
adjustment meets the criteria stated in
ASC 855-10-25-4.
Revised financial statements are considered reissued
financial statements. For guidance on the recognition of
subsequent events in reissued financial statements, see
ASC 855-10-25-4 (ASC 855-10-50-5).
Retrospective adjustment for basic and diluted EPS
Basic and diluted EPS are adjusted retrospectively for all
periods presented if the number of ordinary or potential
ordinary shares outstanding increases as a result of a
capitalisation, bonus issue or share split, or decreases as
a result of a reverse share split. If these changes occur
after the reporting period but before the financial
statements are authorised for issue, the per share
calculations for those and any prior period financial
statements presented shall be based on the new number
of shares (IAS 33.64).
If after the balance sheet date but before the date the
financial statements were issued or the date the
financial statements were available to be issued an
entity’s common shares outstanding either increase due
to a stock dividend or stock split or decrease as a result
of a reverse stock split, the computations of basic and
diluted EPS are adjusted retroactively for all periods
presented. If per-share computations reflect such
changes in the number of shares that fact must be
disclosed (ASC 260-10-55-12);
also (SEC SAB Topic 4: C).
Disclosure for business combinations
IFRS 3 (revised 2008) contains extensive disclosure
requirements for each business combination effected
during the current reporting period or after the end of the
reporting period but before the financial statements are
authorised for issue (IFRS 3.59-.63 and B64-B67).
ASC 805-10-50-1 through 50-4; ASC 805-20-50-1
through 50-3; ASC 805-30-50-1 through 50-3 include
disclosures that must be provided if a material business
combination is completed after the balance sheet date
but before the financial statements are issued (unless
not practicable) (ASC 855-10-55-2).
Current vs. non-current presentation of debt – breach of a provision of a long-term debt agreement
When an entity breaches a provision of a long-term loan
agreement on or before the end of the reporting period
with the effect that the liability becomes payable on
demand, it classifies the liability as current, even if the
lender agreed after the reporting period and before the
authorisation of the financial statements for issue, not to
demand payment as a consequence of the breach. An
entity classifies the liability as current because, at the end
of the reporting period, it does not have an unconditional
Unlike IFRS, an entity must classify as current a longterm
obligation that is or will be callable by a creditor
because of the entity’s violation of a provision of the
debt agreement at the balance sheet date or because
the violation, if not cured within a specified grace
period, will make the obligation callable unless
(ASC 470-10-45-11):
• The creditor has waived or subsequently lost the
right to demand repayment for more than one year
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