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

Comparison between U.S. GAAP and International Financial Reporting Standards 36
IFRS
U.S. GAAP
may overlap with rules and standards of other agencies,
the Board directed the staff to obtain input from the
staffs at the SEC, AICPA, and PCAOB on the revised
draft and any conflict with existing and/or pending
guidance related to this topic. This project is now
referred to as Disclosure about Risks and Uncertainties
and the Liquidation Basis of Accounting (formerly Going
Concern).
3.2 Changes in accounting policy and correction of errors
Note: In October 2010, the IASB and the FASB each published documents seeking views on when new financial
reporting standards resulting primarily from their work to improve and achieve convergence of IFRS and U.S. GAAP
should become effective.
When finalizing an IFRS, the IASB will identify a date from which entities will be required to start applying the new
requirements (known as the effective date). This date is often 12-18 months after the date the IFRS is published. This
allows time for entities to prepare for the change and for jurisdictions to implement the IFRS into their legal or
regulatory regime. The IASB also specifies in each IFRS, how the new requirements should be implemented.
The IASB is working to complete a number of projects that will lead to new IFRS or improvements to existing IFRS.
Some of these projects are being addressed jointly with the FASB. Through this Request for Views, Effective Dates
and Transition Methods, the IASB is seeking views on how it can best help those that will be affected by the
improvements to financial reporting, manage both the pace and cost of change. The FASB Discussion Paper, Effective
Dates and Transition Methods invites comments on the same issues raised in the IASB Request for Views.
The comment period ended January 31, 2011.
IFRS
U.S. GAAP
Relevant guidance: IAS 8 and 33 Relevant guidance: ASC 250, 260;
SEC SAB Topic 11:M
Introduction
Change in accounting policy:
• A change in accounting policy shall be made if (a) it is
required by a standard or interpretation, or (b) the
change will result in the financial statements
providing reliable and more relevant information
about the effects of transactions, other events, or
conditions on the entity’s financial position, financial
performance, or cash flows (IAS 8.14)
Change in accounting principle:
• Similar to IFRS, a change in accounting principle
shall be made only if (a) the change is required by
a newly issued accounting pronouncement or (b)
the entity can justify the use of an allowable
alternative accounting principle on the basis that it
is preferable (ASC 250-10-45-2)
• The initial application of a policy to revalue assets
under IAS 16 (fixed assets) or IAS 38 (intangibles) is
a change in an accounting policy. However, that
change is accounted for under IAS 16 and IAS 38
and not IAS 8 (IAS 8.17).
• Unless an individual standard specifies otherwise, a
change in accounting policy shall be applied
• Unlike IFRS, fixed assets and intangibles shall not
be revalued in a manner similar to that provided by
IAS 16 or IAS 38
• Similar to IAS 8 (ASC 250-10-45-5 through 45-8).
ASC 250-10-45-9 through 45-10 lists the conditions
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