Latin American Capital Markets

Copyright © by the Inter-American Development Bank. All rights reserved.For more information visit our website: www.iadb.org/pub232 PIETRO MASCI AND IVAN SOTOMAYORTable 7-2 | Areas of Major Differences between IAS and U.S. GAAP (continued)Area of difference IAS U.S. GAAPHyperinflation General price-level adjustment of subsidiary's financialstatements is required and gain or loss of netmonetary position is recorded in net incomeRemeasure of subsidiary using parent's functionalcurrencyDiscontinued operations:Expectation for futureoperating lossesDirect initial costsfor lessorsForeign exchange differenceson monetary transactionsNo accrual AccrualAmortize or expense over the term of the lease 3 Recognized as an expenseSometimes is added to the cost basis of the asset 3 Always recorded in net incomeSegment reporting Business segments are lines of business andgeographical areas. Must report using consolidatedGAAR Segment definitionSegments are components for which informationis reported to management and can use whateverGAAP is used for internal purposes. No segmentdefinitionProperty, plant and equipmentRevaluation is allowed Revaluation is not allowedInvestment in property Can use either fair value or cost model Only cost model is allowedCorrection of errors Either restate or include cumulative effect inearnings 3 Restate