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

More documents

Recommendations

Info

Comparison between U.S. GAAP and International Financial Reporting Standards 4 Preface Approximately 120 countries require or permit the use of International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). Although the United States is not one of them, there has been significant progress on converging U.S. GAAP with IFRS over the course of many years. In September 2002, the Financial Accounting Standards Board (FASB) and the IASB issued a memorandum of understanding (the Norwalk Agreement) wherein they “acknowledged their commitment to high-quality, compatible accounting standards that could be used for both domestic and cross-border financial reporting.” In February 2006, the Boards issued A Roadmap for Convergence between IFRSs and US GAAP – 2006 - 2008; Memorandum of Understanding between the FASB and the IASB and reaffirmed their commitment to the convergence of U.S. GAAP and IFRS. In September 2008, the Boards issued an update to the 2006 Memorandum of Understanding. In November 2009, the Boards issued a joint statement, FASB and IASB Reaffirm Commitment to Memorandum of Understanding, describing their plans and milestone targets for achieving the goal of completing major joint Memorandum of Understanding projects by the end of June 2011. In June 2010, the IASB and FASB announced the issuance of a joint statement on revisions to their convergence work plan. The target completion dates for a few projects were extended beyond the first half of 2011. It is expected that this action by the IASB and FASB will not negatively impact the Securities and Exchange Commission’s consideration in 2011 of whether and how to incorporate IFRS into the U.S. financial system. For many years in the United States, the Securities and Exchange Commission (SEC) required all foreign private issuer (FPI) companies to provide a reconciliation between their home-country required generally accepted accounting principles and U.S. GAAP. A number of parties had expressed interest in both the removal of the reconciliation requirement for FPIs using IFRS and in the acceptance of IFRS as a set of highquality, transparent global accounting standards. In December 2007, the SEC adopted a final rule, Acceptance From Foreign Private Issuers of Financial Statements Prepared in Accordance With International Financial Reporting Standards Without Reconciliation to U.S. GAAP, allowing FPIs whose financial statements are prepared using IFRS as issued by the IASB to file their financial statements without reconciliation to U.S. GAAP. In August 2007, the SEC issued a concept release on allowing U.S. issuers to prepare financial statements in accordance with IFRS. On November 14, 2008, the SEC issued its proposed Roadmap for the Potential Use of Financial Statements Prepared in Accordance with International Financial Reporting Standards by U.S. Issuers (the Roadmap), which could lead to a requirement for U.S. issuers to use IFRS as issued by the IASB as early as 2014. The Roadmap proposed milestones that the SEC would assess in 2011 in order to determine whether to proceed with rulemaking to mandate the use of IFRS by all domestic issuers, including: Improvements in IFRS accounting standards Adequate accountability, independence and funding of the International Accounting Standards Committee Foundation Availability of more detailed tagging for interactive reporting Advances in IFRS education and training © 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 5 If the SEC proceeds to mandate IFRS for all domestic issuers, the Roadmap proposes phased-in adoption dates of 2014, 2015, and 2016, depending on the size of the issuer. In February 2010 the SEC reaffirmed its support for convergence of accounting standards, but stated that more information was needed to make a well-informed decision on whether to incorporate the use of International Financial Reporting Standards into the U.S. financial reporting system. The SEC staff developed and has begun to execute an IFRS Work Plan to gather information to evaluate and provide further information to the Commission. On October 29, 2010 the SEC issued its first Progress Report on the Work Plan. The Progress Report summarizes the SEC staff’s efforts and preliminary observations to date to address the six major objectives in the Work Plan. Those objectives are: Sufficient development and application of IFRS for the U.S. domestic reporting system Independent standard setting for the benefit of investors Investor understanding and education regarding IFRS Regulatory environment Impact on issuers Human capital readiness There is still a lot of work to be done by the SEC staff before the Commission deliberates and decides whether to allow the use of IFRS in the U.S. The SEC staff does not expect to complete the IFRS Work Plan until the latter part of 2011. After that, the SEC will decide whether to incorporate IFRS into the U.S. financial reporting system. Although there are many issues that remain to be addressed, many observers believe that the U.S. capital markets eventually will adopt IFRS. In the meantime, given the number of differences that still exist between IFRS and U.S. GAAP, it is incumbent on preparers, auditors, and regulators to be aware of differences between these two sets of standards. We have prepared the Comparison between U.S. GAAP and International Financial Reporting Standards (Comparison) to help readers identify similarities and differences between IFRS and U.S. GAAP. More emphasis is placed on recognition, measurement, and presentation guidelines and less emphasis is placed on disclosure requirements. As more fully explained in Section 1, “Introduction,” this Comparison covers only those differences that we believe are more commonly encountered in practice. It includes standards issued through December 31, 2010. We have included Appendices that list the titles of all IFRS, U.S. GAAP, and SEC standards that are referred to in this document. © 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: Comparison between U.S. GAAP and In
Page 55 and 56:
Comparison between U.S. GAAP and In
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:
Page 105 and 106:
Page 107 and 108:
Page 109 and 110:
Page 111 and 112:
Page 113 and 114:
Page 115 and 116:
Page 117 and 118:
Page 119 and 120:
Page 121 and 122:
Page 123 and 124:
Page 125 and 126:
Page 127 and 128:
Page 129 and 130:
Page 131 and 132:
Page 133 and 134:
Page 135 and 136:
Page 137 and 138:
Page 139 and 140:
Page 141 and 142:
Page 143 and 144:
Page 145 and 146:
Page 147 and 148:
Page 149 and 150:
Page 151 and 152:
Page 153 and 154:
Page 155 and 156:
Page 157 and 158:
Page 159 and 160:
Page 161 and 162:
Page 163 and 164:
Page 165 and 166:
Page 167 and 168:
Page 169 and 170:
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?