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

More documents

Recommendations

Info

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 © 2011 Grant Thornton LLP All rights reserved U.S. member firm of Grant Thornton International Ltd
Comparison between U.S. GAAP and International Financial Reporting Standards 149 IFRS right to defer its settlement for at least 12 months after that date (IAS 1.74). U.S. GAAP (or operating cycle, if longer) from the balance sheet date; or • For long-term obligations containing a grace period within which the entity may cure the violation, it is probable that the violation will be cured within that period Refinancing of short-term obligations on a long-term basis An entity classifies its financial liabilities as current when they are due to be settled within 12 months after the reporting period, even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the financial statements are authorised for issue (IAS1.72(b)). Unlike IFRS, short-term obligations are classified as long-term if the entity intends to refinance the shortterm obligation on a long-term basis and, prior to issuing the financial statements, the entity can demonstrate an ability to refinance the short-term obligation (ASC 470-10-45). 10.5 Operating segments IFRS U.S. GAAP Relevant guidance: IFRS 8: IAS 34 Relevant guidance: ASC 280 Introduction The core principle of IFRS 8 is that an entity shall disclose information to enable users of its financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates (IFRS 8.1 and .20). IFRS 8 was issued as a result of the joint project with the FASB to converge IFRS segment reporting requirements with the U.S. GAAP ASC 280, except for minor differences listed in IFRS 8, BC60. The wording of IFRS 8 is the same as that of ASC 280except for changes to make the terminology consistent with that in other IFRS (IFRS 8.IN3). IFRS 8 applies to the separate or individual financial statements of an entity and the consolidated financial statements of a group with a parent (IFRS 8.2): • Whose debt or equity instruments are traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets), or • That files, or is in the process of filing, its financial statements/consolidated financial statements with a securities commission or other regulatory organizations for the purpose of issuing any class of instruments in a public market The objective of ASC 280 is to provide information about different types of business activities in which an enterprise engages and the different economic environments in which it operates to help users of financial statements (ASC 280-10-10-1): • Better understand the enterprise’s performance • Better assess its prospects for future net cash flows • Make more informed judgments about the enterprise as a whole ASC 280 applies to public business enterprises that: • Have issued debt or equity securities or are conduit bond obligors for conduit debt securities that are traded in a public market (a domestic or foreign stock exchange or an over-the counter market, including local or regional markets) • Are required to file financial statements with the SEC, or • Provide financial statements for the purpose of issuing any class of securities in a public market ASC 280 does not apply to parent enterprises, subsidiaries, joint ventures, or investees accounted for by the equity method if those enterprises’ separate © 2011 Grant Thornton LLP All rights reserved U.S. member firm of Grant Thornton International Ltd
Page 1 and 2:
Comparison between U.S. GAAP and In
Page 3 and 4:
Page 5 and 6:
Page 7 and 8:
Page 9 and 10:
Page 11 and 12:
Page 13 and 14:
Page 15 and 16:
Page 17 and 18:
Page 19 and 20:
Page 21 and 22:
Page 23 and 24:
Page 25 and 26:
Page 27 and 28:
Page 29 and 30:
Page 31 and 32:
Page 33 and 34:
Page 35 and 36:
Page 37 and 38:
Page 39 and 40:
Page 41 and 42:
Page 43 and 44:
Page 45 and 46:
Page 47 and 48:
Page 49 and 50:
Page 51 and 52:
Page 53 and 54:
Page 55 and 56:
Page 57 and 58:
Page 59 and 60:
Page 61 and 62:
Page 63 and 64:
Page 65 and 66:
Page 67 and 68:
Page 69 and 70:
Page 71 and 72:
Page 73 and 74:
Page 75 and 76:
Page 77 and 78:
Page 79 and 80:
Page 81 and 82:
Page 83 and 84:
Page 85 and 86:
Page 87 and 88:
Page 89 and 90:
Page 91 and 92:
Page 93 and 94:
Page 95 and 96:
Page 97 and 98: Comparison between U.S. GAAP and In
Page 147: Comparison between U.S. GAAP and In
show all

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

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?