Mexican Gaap vs Us Gaap

Topics: Generally Accepted Accounting Principles, Balance sheet, Financial statements Pages: 2 (612 words) Published: January 27, 2013
Inflation| Effects of inflation should be recorded on the financial statement.Included in the results of operations is a gain or loss from monetary position that represents the inflation gain or loss from maintaining net monetary liabilities or assets, respectively.| In the U.S. GAAP no gain or loss on monetary position is recognized in the financial statements.| Deferred Taxes| Mexican GAAP recognizesDeferred tax effects for all transactions that are affected in different periods. Deferred income tax assets and liabilities are determined by comparing the financial statement and tax basis of assets and liabilities and multiplying the difference by the enacted tax rate. | U.S. GAAP requires an asset and liability approach for financial accounting and reporting for income taxes. Deferred tax assets are reduced by a valuation allowance when it is more likely that some or all of the deferred tax assets will not be realized.| Employee Profit Sharing| Current and deferred employee profit sharing expense is included in provisions under Mexican GAAP.| The provision for current and deferred employee profit sharing is expensed as incurred as an operating expense for U.S. GAAP purposes.| Purchase Accounting| The excess of the purchase price over the net book value is recorded as goodwill and amortized over a period not to exceed twenty years.Negative goodwill is recorded as a deferred credit and amortized over a period not to exceed five years.| The purchase method of accounting requires to record at fair value the assets acquired and liabilities assumed. The difference between the purchase price and the sum of the fair value assets less liabilities assumed is recorded as goodwill. Goodwill is amortized over a period not to exceed forty years.Negative goodwill should be allocated to proportionately reduce the values assigned to noncurrent assets | Consolidation| An entity should consolidate all subsidiaries in...
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