GAAP and IFRS

Topics: International Financial Reporting Standards, Financial statements, Balance sheet Pages: 18 (1770 words) Published: April 22, 2014
Outline

Part 1 Background and Overview
Part 2 US GAAP and IFRS
Part 3 China GAAP and IFRS
Part 4 Summary of Convergence Process
Part 5 Pros & Cons of Convergence
Part 6 The reasons for differences in accounting practice

ww.ifrs.org

+ The International Accounting Standards Board
+ The International Accounting Standards Committee (IASC) Foundation + Objective – a single set of global financial reporting standards + Aim – convergence between national standards and international

standards
+ IFRS Framework
+ IFRS SMEs

+ Supported by the Group of 20 Leaders (G20) who, at their September

2009 meeting in Pittsburgh, US.

Country

Status for listed companies as of April 2010

Argentina Required for fiscal years beginning on or after 1 January 2011 Australia

Required for all private sector reporting entities and as the basis for public sector reporting since 2005

Brazil

Required for consolidated financial statements of banks and listed companies from 31 December 2010 and for individual company accounts progressively since January 2008

Canada

Required from 1 January 2011 for all listed entities and permitted for private sector entities including not-for-profit organizations

Country

Status for listed companies as of April 2010

China

Substantially converged national standards

European All member states of the EU are required to use IFRSs as adopted by the EU for listed Union
companies since 2005
France

Required via EU adoption and implementation process since 2005

Germany

Required via EU adoption and implementation process since 2005

India

India is converging with IFRSs at a date to be confirmed.

Indonesia

Convergence process ongoing; a decision about a target date for full compliance with IFRSs is expected to be made in 2012

Italy

Required via EU adoption and implementation process since 2005

Japan

Permitted from 2010 for a number of international companies; decision about mandatory adoption by 2016 expected around 2012

Mexico

Required from 2012

Country

Status for listed companies as of April 2010

Republic of
Korea

Required from 2011

Russia

Required from 2012

Required for banking and insurance companies. For all other entities, substantially Saudi Arabia converged national standards are applicable and IFRSs are required for subjects not covered by national standards. Full convergence with IFRSs currently under consideration. South Africa Required for listed entities since 2005

Turkey

Required for listed entities since 2005

United
Kingdom

Required via EU adoption and implementation process since 2005

Allowed for foreign issuers in the US since 2007; target date for substantial convergence United States with IFRSs is 2011 and decision about possible adoption for US companies expected in 2011.
ww.ifrs.org

+ India - to be confirmed
+ Japan - 2016, because Japanese listed companies do not want to report

loss under IFRS standards
+ Japanese GAAP into conformity with IFRS with adjustments concern for

the most part the valuation methodologies used for financial disclosures, not the presentation.
+ Japanese - high gearing ratio - more confidence

+ Hong Kong - Hong Kong Financial Reporting Standards (“HKFRSs”)1 were

fully converged with International Financial Reporting Standards (“IFRSs”) with effect from 1 January 2005.
+ -

Information Paper, Setting Hong Kong Financial Reporting Standards, HKICPA, June 2006

US GAAP and IFRS
Item

IFRS

US GAAP

Generally

Principle-based standards with
limited application guidance

Rule-based standards with
specific application guidance

Revenue recognition

Economic benefits associated
with the transaction will flow to
the entity

Being realized and earned and
involving an exchange
transaction

Non-recurring items

Prohibited

“Extraordinary Items” excluded
in EPS calculation

Inventory costing

LIFO is...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Gaap & Ifrs Essay
  • IFRS TO GAAP Essay
  • Gaap vs Ifrs Essay
  • IFRS Vs US GAAp Essay
  • Comparing the Gaap and Ifrs Essay
  • Essay about Differences Between Gaap and Ifrs
  • Ifrs vs Gaap Essay
  • Ifrs and Gaap Essay

Become a StudyMode Member

Sign Up - It's Free