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

More documents

Recommendations

Info

Comparison between U.S. GAAP and International Financial Reporting Standards 154 IFRS areas that is required by IFRS 8.33, unless the necessary information is not available and the cost to develop it would be excessive. Information about major customers An entity shall provide information about the extent of its reliance on its major customers. If revenues from transactions with a single external customer amount to 10 percent or more of an entity’s revenues, the entity shall disclose that fact, the total amount of revenues from each such customer, and the identity of the segment or segments reporting the revenues. The entity need not disclose the identity of a major customer or the amount of revenues that each segment reports from that customer. For purposes of IFRS 8, a group of entities known to a reporting entity to be under common control shall be considered a single customer. However, judgement is required to assess whether a government (including government agencies and similar bodies whether local, national or international) and entities known to the reporting entity to be under the control of that government are considered a single customer. In assessing this, the reporting entity shall consider the extent of economic integration between those entities (IFRS 8.34). U.S. GAAP Interim period information IAS 34, on interim financial reporting, requires an entity to report selected information about its operating segments in interim financial reports (IAS 34.16A(g)). ASC 280-10-50-32 through 50-33 requires similar disclosures about each reportable segment in condensed financial statements of interim periods. 10.6 Related party disclosures Note: A revised version of IAS 24 was issued on November 4, 2009. That version is effective for annual periods beginning on or after January 1, 2011, with earlier application permitted. The revisions relate substantially to the following: • Introduced a partial exemption from the disclosure requirements of IAS 24 for transactions with (a) a government that has control, joint control or significant influence over the reporting entity and (b) government-related entities, which are entities controlled, jointly controlled or significantly influenced by that same government • Amended the definition of a related party to clarify the intended meaning and remove some inconsistencies. It makes it explicitly clear that in the definition of a related party, an associate includes subsidiaries of the associate and a joint venture includes subsidiaries of the joint venture. IFRS Relevant guidance: IAS 24 (revised 2003) Note: The text below has not been revised for the 2009 version of IAS 24, which is effective for annual periods beginning on or after January 1, 2011. U.S. GAAP Relevant guidance: ASC 740, 825, and 850 ; SEC Regulation S-K, Item 402; SEC Regulation S-X, Rule 4-08(k) © 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 155 IFRS U.S. GAAP Introduction The objective of IAS 24 is to ensure that an entity’s financial statements contain the disclosures necessary to draw attention to the possibility that its financial position and profit or loss may have been affected by the existence of related parties and by transactions and outstanding balances with such parties (IAS 24.1). A related party transaction is a transfer of resources, services or obligations between related parties regardless of whether a price is charged (IAS 24.9). A party is related to an entity if (IAS 24.9): • The party directly or indirectly through one or more intermediaries (i) controls, is controlled by, or is under common control with the entity (this includes parents, subsidiaries, and fellow subsidiaries); (ii) has an interest in the entity that gives it significant influence over the entity; or (iii) has joint control over the entity • The party is an associate of the entity (see IAS 28) • The party is a joint venture in which the entity is a venturer (see IAS 31) • The party is a member of the key management personnel of the entity or its parent • The party is a close member of the family of any individual referred to in the first and fourth bullets above • The party is an entity that is controlled, jointly controlled or significantly influenced by, or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in the previous two bullets • The party is a post employment benefit plan for the benefit of employees of the entity, or of any entity that is a related party of the entity Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly, or indirectly, including any director (whether executive or otherwise) of that entity (IAS 24.9). In considering each possible related party relationship, attention is directed to the substance of the relationship and not merely the legal form (IAS 24.10). The separate financial statements of a parent, venturer, or investor (prepared in accordance with IAS 27) must disclose related party transactions and outstanding balances (IAS 24.3). ASC 850 (SFAS 57) establishes requirements for related party disclosures (ASC 850-10-05-1). Related parties are (ASC Master Glossary, “Related Parties”): • Affiliates of the enterprise • Entities for which investments in their equity securities would, absent the election of the fair value option under ASC 825, be required to be accounted for by the equity method by the enterprise • Trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management • Principal owners of the enterprise • Management of the enterprise • Members of the immediate families of principal owners (owners of more than 10 percent of voting interests) of the enterprise and its management (ASC Master Glossary, “Principal Owners”) • Other parties with which the enterprise may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests • Another party if it can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests It is not necessary to duplicate disclosures in a set of separate financial statements that is presented in the financial report of another enterprise if those separate statements are also consolidated or combined in a complete set of financial statements and both sets of © 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:
Page 99 and 100:
Page 101 and 102:
Page 103 and 104: Comparison between U.S. GAAP and In
Page 153: Comparison between U.S. GAAP and In
show all

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

Create successful ePaper yourself

Delete template?

Save as template?