Table of Contents
How does IFRS differ from GAAP regarding accounting for income taxes are there any major issues?
While GAAP requires that deferred tax assets and liabilities are recorded as current or non-current on the balance sheet, IFRS uses a more practical approach where all deferred tax items are recorded as non-current.
What are the major differences between US GAAP and IFRS in the reporting of assets and liabilities?
The primary difference between the two systems is that GAAP is rules-based and IFRS is principles-based. This disconnect manifests itself in specific details and interpretations. Basically, IFRS guidelines provide much less overall detail than GAAP.
Which accounting standard is applicable for impairment of assets?
IAS 36 Impairment
IAS 36 Impairment of Assets seeks to ensure that an entity’s assets are not carried at more than their recoverable amount (i.e. the higher of fair value less costs of disposal and value in use).
What are the major difference between GAAP and IFRS?
IFRS is a globally adopted method for accounting, while GAAP is exclusively used within the United States. GAAP focuses on research and is rule-based, whereas IFRS looks at the overall patterns and is based on principle. GAAP uses the Last In, First Out (LIFO) method for inventory estimates.
Which of the following differs in GAAP and IFRS?
Which of the following differs in GAAP and IFRS? IFRS requires that share settlement must be used. IFRS and U.S. GAAP follow the same model. IFRS and U.S. GAAP have significant differences in the reporting of securities with characteristics of debt and equity, such as convertible debt.
How does the definition of asset impairment differ between IAS 36 and US GAAP?
U.S. GAAP considers cash flows in assessing value of continued use, but does not discount them, whereas IAS 36 requires discounting in assessing asset impairment.
Why is GAAP better than IFRS?
IFRS is principles-based, whereas GAAP is rules-based. Essentially, this means that GAAP is far stricter than IFRS, offering specific rules and procedures that leave little room for interpretation. By contrast, IFRS provides general guidelines that companies are encouraged to interpret to the best of their ability.
How impairments are treated under US GAAP and IFRS accounting standards?
GAAP prohibits the reversal of all impairment losses. But, under IFRS, impairment losses for intangibles other than goodwill and for fixed assets can be reversed. Reversal of impairment losses under IFRS are capped at the asset’s initial carrying amount.
Which of the following is not a difference between IFRS and US GAAP in according For non current liabilities?
All of the following are differences between IFRS and U.S. GAAP in accounting for liabilities except: U.S. GAAP, but not IFRS uses the term “provisions” for contingent liabilities which are accrued.
What is the amount of impairment loss under US GAAP?
The impairment loss is the amount by which the carrying amount of the CGU (including goodwill) exceeds its recoverable amount. That loss is then allocated first to goodwill, until goodwill is reduced to zero.
How will income under the US GAAP compare to income the company reported under IFRS after reconciliation?
How will income under the US GAAP compare to income reported under IFRS after reconciliation? Income under US GAAP will be lower by $1,700.
When should an impairment loss be recognized in the income statement?
An impairment loss is recognised immediately in profit or loss (or in comprehensive income if it is a revaluation decrease under IAS 16 or IAS 38).
What is the difference between GAAP and IFRS?
Another major difference is the treatment of asset impairments. Under GAAP, if you have an impairment, then it’s charged to expense, and you cannot take it back. But under IFRS, if the asset’s value goes back up, you can take back the amount of the impairment.
What is an impairment under IFRS?
An impairment under IFRS. Under IFRS, IAS 36 is the primary source of guidance on the impairment of tangible assets. The major points covered under this regulation are: Impairment losses need to be recognized when the asset’s Book Value > asset’s Recoverable amount.
What are the International Financial Reporting Standards for impairment of assets?
International Financial Reporting Standards (IFRS) and U.S. Generally Accepted Accounting Principles (GAAP) provide guidance on impairment of assets. It is important to understand when an asset is to be impaired and how to treat the impairment.
How are impairment testing and measurement of indefinite-lived intangible assets different under GAAP?
Impairment testing and measurement of indefinite-lived intangible assets are different under US GAAP and IFRS. 1. Indefinite-lived intangible assets—assessment level Under US GAAP, the assessment is performed at the asset level. Under IFRS, the assessment may be performed at a higher level (i.e., the CGU level).