Differentiate between conceptual framework of IFRS and US GAAP.

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• 27 Sep, 2020
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Differentiate between conceptual framework of IFRS and US GAAP.

Research Outline

1. Introduction
2. Describe the two accounting standards
3. Describe their conceptual frameworks and the convergence efforts
4. Thesis: Differences between the conceptual frameworks of the two accounting standards exist.
5. Body paragraphs
6. Differences concerning the presentation of financial statements
7. The required financial periods
8. The presentation/layout of the financial statements

• The presentation of debt as current versus noncurrent in the balance sheet

1. The classification of deferred tax assets and liabilities in the balance sheet
2. The classification of expenses in the income statement
3. The criteria for extraordinary items in the income statement

• The criteria for discontinued operations in the income statement
• The disclosure requirements for performance measures

1. The need for a third balance sheet
2. Differences concerning accounting for interim financial reporting
3. The treatments of certain costs in interim periods
4. Differences concerning accounting for consolidation, joint ventures and equity method associates
5. The applicable model of consolidation

• The general preparation of consolidated financial statements

1. The preparation of consolidated financial statements with investment companies
2. The preparation of consolidated financial statements in the case of differences in reporting dates of the parent and its subsidiaries
3. The requirements for uniform accounting policies

• Joint ventures

1. Differences concerning business combinations
2. The measurement of non-controlling interests in subsidiaries
3. Accounting for the operating leases of the acquire

• Accounting for assets and liabilities that arise from contingencies

1. Differences concerning accounting for inventories
2. Methods of costing inventories
3. Measurement

• Reversing inventory write-downs

1. Accounting for permanent markdowns of inventory under RIM
2. Differences concerning accounting for long-lived assets
3. Asset revaluation
4. Depreciation

• Measurement of borrowing costs

1. Major overhaul costs
2. Investment property
3. Differences concerning intangibles
4. Revaluation of intangibles
5. Development costs

• Advertising costs

1. Differences concerning accounting for the impairment of long-lived assets, goodwill, and intangible assets
2. Determination of impairment of long-lived assets
3. Calculation of impairment loss for long-lived assets

• Assignment of goodwill

1. Determination of goodwill impairment
2. Calculation of goodwill impairment loss
3. Assessment of indefinite-lived intangibles

• Calculation of impairment loss for indefinite-lived intangibles
• Loss reversals

1. Differences concerning accounting for financial instruments
2. Classification
3. Hybrid financial instruments

• Recognition and measurement

1. Derivatives and hedging
2. De-recognition
3. Loans and receivables

• Measurement of fair value

1. Differences concerning accounting for foreign currency issues
2. Translation of functional currency of foreign operations in hyperinflation
3. Consolidating foreign operation
4. Differences concerning leases
5. Real estate leases
6. Recognition of gain/loss on sale of operating leaseback

• Recognition of gain/loss on sale of capital lease

1. Differences concerning Income taxes
2. Tax basis
3. Uncertain tax position

• Taxes on intercompany transfer of assets remaining within the group

1. Balance sheet classification of deferred tax assets and liabilities
2. Deferred tax assets recognition
3. Differences concerning revenue recognition
4. Sale of goods
5. Sale of services

• Multiple elements

1. Deferred receipt of receivables
2. Construction contracts
3. Differences concerning share-based payments
4. Deferred taxes
5. Transactions with non-employees

• Measurement and recognition of expense

1. Modification of vesting terms
2. Differences concerning non-share-based employment benefits and payments
3. Actuarial method used
4. Calculation of expected return on plan assets

• Recognition of prior service costs

1. Settlement and curtailments
2. Accounting for multiemployer pension plans
3. Differences concerning earnings per share
4. Contracts that can be settled in shares or cash
5. Calculation of year-to-date and diluted EPS

• Accounting for contingently convertible debt

1. Differences concerning segmental reporting
2. Segments determination
3. Disclosure requirements
4. Differences concerning subsequent events
5. Date of evaluating subsequent events
6. Reissuance of financial statements

• Treatment of short-term loans that are refinanced with long-term loans after the balance sheet date

1. Differences concerning related parties
2. Scope of related parties
3. Conclusion
4. Restatement of the thesis

Summary of the issues covered