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Dick’s Sporting Goods
IFRS Conversion

Introduction
Dick’s Sporting Goods is a sporting goods retailer headquartered in Pittsburgh, Pennsylvania. Dick’s has 451 stores nationwide and 81 Golf Galaxy stores. Dick’s Sporting Goods was founded by Richard Stack in the early 1960s. This paper is focused on the notes of the consolidated financial statements which are changed from U.S. GAAP to the IFRS standards. Financial Statement Presentation

First, on the 2011 Annual Report of Dick’s Sporting Goods page 51, the title Balance Sheet will need to be converted to Statement of Financial position (IAS 1.60). Also the presentation of the Balance Sheet/Statement of Financial Position will need to be changed. Both the Balance Sheet and Statement of Financial Position serve the same ultimate purpose of listing assets, liabilities, and shareholder’s equity at a certain point in time; however, the order of the accounts will be different. Dick’s Sporting Goods will need to present the assets and liabilities in order of long-term, than short-term. The order of assets and liabilities will have to be presented in the order of non-current assets, current assets, shareholder’s equity, non-current liabilities, and current liabilities. GAAP orders the assets and liabilities in order of liquidity, but the Statement of Financial Position method of ordering assets and liabilities favors from an investor’s perspective. The Balance sheet is “outdated” as it was mostly viewed by banks and creditors. The Statement of Financial Position is more relevant as it emphasizes elements important to creditors who are the primary users today. When it comes to classifying assets and liabilities as current or non-current, assets and liabilities can only be classified as current if they come due within one year under IFRS standards whereas U.S. GAAP requires the longer of one year or the operating cycle (IAS 1.61). Comprehensive Income

Dick’s Sporting Goods reported comprehensive income in a separate statement of Consolidated Statements of Comprehensive Income on page 52 of the 2011 Annual Report. Therefore, Dick’s Sporting Goods compliments IFRS standards as IAS 1 state that Dick’s Sporting Goods has the option of choosing to report comprehensive income in separate statement after the income statement or in one single statement of comprehensive income that cannot be relegated to the statement of change in equity. This treatment of OCI clearly segregates the regular income items found in Net Income and the other comprehensive income items that are found in Comprehensive Income. “In June 2011, the FASB issued ASU 2011-05, ‘‘Presentation of Comprehensive Income.’’ This update amended the presentation options in ASC 220, ‘‘Comprehensive Income,’’ to provide an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements” (2011 Annual Report, 59). Inventory

The 2011 Annual Report of Dick’s Sporting Goods on page 55 states, “Inventories are stated at the lower of average cost or market.” Lower of Average Cost or Market, first in, first out, and the average cost methods are all IFRS permissible. GAAP defines the market as the midpoint of replacement cost with a ceiling of net realizable value (NRV) and a floor of net realizable value less the normal profit margin. Under IFRS rules, the market value is always the net realizable value (IAS 2). Dick’s Sporting Goods could make this adjustment by valuing the market at net realizable value. The NRV is the estimated selling price less the estimated cost of completion and the estimated costs necessary to make the sale (IAS 2.6). Additionally, IFRS allows the reversal of inventory write-downs if in later periods if the NRV increases (IAS 2.3). To take advantage of this IFRS standard, Dick’s Sporting Goods should use an...
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