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

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Comparison between U.S. GAAP and International Financial Reporting Standards 28 IFRS in excess of the cumulative impairment loss that has been recognised either in accordance with IFRS 5 or previously in accordance with IAS 36 (IFRS 5.21). A gain is recognised for any subsequent increase in fair value less costs to sell of a disposal group (IFRS 5.22): • To the extent that it has not been recognised in accordance with IFRS 5.19 • Not in excess of the cumulative impairment loss that has been recognised, either in accordance with IFRS 5 or previously in accordance with IAS 36 on the non-current assets that are within the scope of the measurement requirements of IFRS 5 An entity shall not depreciate (or amortise) a non-current asset while it is classified as held for sale or while it is part of a disposal group classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale shall continue to be recognised (IFRS 5.25). Changes to a plan of sale IFRS 5.26-.29 deal with situations where assets or disposal groups previously classified as held for sale no longer meet those criteria. The asset or disposal group is no longer classified as held for sale and disclosure of the circumstances surrounding the change is required (IFRS 5.26 and .42). After the change, the assets are remeasured at the lower of their carrying amount prior to the classification as held for sale, adjusted for any depreciation, amortisation or revaluations, or their recoverable amount at the date of the subsequent decision to sell (IFRS 5.27). Non-current assets that are to be abandoned An entity shall not classify as held for sale a non-current asset (disposal group) that is to be abandoned. This is because its carrying amount will be recovered principally through continuing use. However, if the disposal group to be abandoned meets the criteria in IFRS 5.32(a)-(c), the entity shall present the results and cash flows of the disposal group as discontinued operations in accordance with IFRS 5.33-.34 at the date on which it ceases to be used (IFRS 5.13). U.S. GAAP Changes to a plan of sale Similar to IFRS (ASC 360-10- 35-44 through 35-45 and 45- 7). Long-lived assets to be abandoned Similar to IFRS. Long-lived assets to be abandoned continue to be classified as long-lived assets to be held and used (ASC 360-10- 45-15, ASC 360-10-35-47 through 35-48). Timing considerations If the held for sale criteria in IFRS 5.7-.8 are met after the reporting period, an entity shall not classify a non-current asset (disposal group) as held for sale in those financial statements when issued. However, when those criteria are met after the reporting period but before the authorisation of the financial statements for issue, the entity shall disclose the information specified in IFRS 5.41(a), (b), and (d) in the notes (IFRS 5.12). Similar to IFRS except that for those situations where the criteria are met after the balance sheet date but before issuance of the financial © 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 29 IFRS U.S. GAAP statements, ASC 360 requires disclosure of the carrying amounts of the major classes of assets and liabilities included as part of a disposal group and IFRS 5 does not (ASC 360-10- 45-13). Furthermore, ASC 360 requires disclosure of the segment in which the asset is presented and IFRS 5 does not (ASC 205-20- 50-1). Presentation and disclosure The key disclosures required for discontinued operations are (IFRS 5.33): • A single amount in the statement of comprehensive income comprising the total of: he post-tax profit or loss of discontinued operations; and he post-tax gain or loss recognised on the measurement to fair value less costs to sell or on the disposal of the assets or disposal group(s) constituting the discontinued operation • An analysis of the above single amount (in the statement of comprehensive income or in the notes) into: he revenue, expenses and pre-tax profit or loss of discontinued operations he gain or loss recognised on the measurement to fair value less costs to sell or on the disposal of the assets or disposal group(s) constituting the discontinued operation; and he related income tax expense as required by IAS 12.81(h). If the analysis is shown in the statement of comprehensive income it shall be presented in a section identified as relating to discontinued operations. • Net cash flows attributable to the operating, investing and financing activities of discontinued operations. These disclosures may be presented either in the notes or in the financial When a component of an entity either has been disposed of or is classified as held for sale, the following is reported (net of income taxes (benefit)) separately on the face of the income statement in discontinued operations for current and prior periods (ASC 205-20- 45-3): • Results of operations © 2011 Grant Thornton LLP All rights reserved U.S. member firm of Grant Thornton International Ltd
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