Week 4 Assignment
International Financial Reporting Standards
Jose L. Gomez
Accounting Capstone
March 26, 2015
Abstract
The FASB and IFRS continually improve upon accounting standards and rulings in an effort to converge GAAP with international standards. In fact, several standard and ruling updates are being contemplated at this moment through pending discussions and through exposure drafts (PWC, 2011-2015); we will review a few of these in the next few paragraphs
Differences between GAAP and IFRS
First we should address a few differences between GAAP and IFRS standards in order to understand the main reasons for so much change taking place at the present time with the standards and rulings and all the discussions of FASB and IASB. Both authoritative bodies agreed to work together to address the nine most important differences. These are listed in the table below:
Difference
GAAP
IFRS
Financial Period
Businesses need to choose their financial period ahead of time. The options are calendar or a fiscal year. A calendar year is simply January through December while a fiscal year can start during any month of the year and last 12 months.
Comparative disclosures for previously reported amounts are required. (KPMG.com/FIRS, 2013)
Presenting the Balance Sheet and Income
No particular layout is requested for the balance sheet and income statement; however, Reg. S-X applies to public companies.
No specific layout either is mandated but there are specific minimums for the statements however, the minimums are significantly less than those of Reg. S-X
Current and Non-Current Debt presentation requirements
Covenant violation debt is allowed as non-current before the statements are released, so long as a waiver is included in the lender agreement.
Unless there is a agreement with the lender prior to balance sheet date, this type of debt must be presented as current.
Classifying Deferred Tax & Liabilities
Allowed as a current or non-current
considered
Jose L. Gomez
Accounting Capstone
March 26, 2015
Abstract
The FASB and IFRS continually improve upon accounting standards and rulings in an effort to converge GAAP with international standards. In fact, several standard and ruling updates are being contemplated at this moment through pending discussions and through exposure drafts (PWC, 2011-2015); we will review a few of these in the next few paragraphs
Differences between GAAP and IFRS
First we should address a few differences between GAAP and IFRS standards in order to understand the main reasons for so much change taking place at the present time with the standards and rulings and all the discussions of FASB and IASB. Both authoritative bodies agreed to work together to address the nine most important differences. These are listed in the table below:
Difference
GAAP
IFRS
Financial Period
Businesses need to choose their financial period ahead of time. The options are calendar or a fiscal year. A calendar year is simply January through December while a fiscal year can start during any month of the year and last 12 months.
Comparative disclosures for previously reported amounts are required. (KPMG.com/FIRS, 2013)
Presenting the Balance Sheet and Income
No particular layout is requested for the balance sheet and income statement; however, Reg. S-X applies to public companies.
No specific layout either is mandated but there are specific minimums for the statements however, the minimums are significantly less than those of Reg. S-X
Current and Non-Current Debt presentation requirements
Covenant violation debt is allowed as non-current before the statements are released, so long as a waiver is included in the lender agreement.
Unless there is a agreement with the lender prior to balance sheet date, this type of debt must be presented as current.
Classifying Deferred Tax & Liabilities
Allowed as a current or non-current
considered
References: Ernst & Young. (2011, December). US GAAP versus IFRS. Retrieved February 8, 2015, from http://www.ey.com/Publication/vwLUAssets/US_GAAP_v_IFRS:_The_Basics/$FILE/US%20GAAP%20v%20IFRS%20Dec%202011.pdf Gomez, J. L. (2015). Adoption of FIRS in The US. KPMG.com/FIRS. (2013, September). Guide to Annual Financial Statements-Disclosure Checklist. Retrieved February 8, 2015, from KPMG.com: http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/IFRS-guide-to-financial-statements/Documents/guide-disclosure-checklist-sept13.pdf PWC. (2011-2015). IFRS Updates. Retrieved March 23, 2015, from http://www.pwc.com/gx/en/ifrs-reporting/technical-updates.jhtml