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普华永道_IFRS USGAAP 比较(英文版)

普华永道_IFRS USGAAP 比较(英文版)

http://www.wendangku.net/doc/30f9293b0912a216147929a7.html/ifrs

February 2004

Similarities and Differences A comparison of IFRS and US GAAP

PRINT (NOTE:

普华永道_IFRS USGAAP 比较(英文版)

contains 84 pages)

CONTENTS

Other publications on IFRS

PricewaterhouseCoopers has published the following publications on International Financial Reporting Standards and corporate practices; they are available from your nearest PricewaterhouseCoopers of?ce.

Applying IFRS – Finding the right solution (available on Comperio IFRS1)

Adopting IFRS – A step-by-step illustration of the transition to IFRS

International Accounting Standards – A Pocket Guide

Financial instruments under IFRS

Illustrative Corporate Financial Statements

Illustrative Bank Financial Statements

Illustrative Funds Financial Statements2

Illustrative Investment Property Financial Statements2

International Financial Reporting Standards – Disclosure Checklist

Understanding IAS 29 – Financial Reporting in Hyperin?ationary Economies

IFRS News – Shedding light on the IASB’s activities

Making the Change to International Financial Reporting Standards

Europe and IFRS 2005 – Your questions answered

2005 – Ready or not. IFRS Survey of over 650 CFOs

World Watch – Governance and Corporate Reporting

Audit Committees – Good Practices for Meeting Market Expectations

Building the European Capital Market – Common Principles for a Capital Market

Reporting Progress – Good Practices for Meeting Market Expectations

These publications and the latest news on IFRS can be found at http://www.wendangku.net/doc/30f9293b0912a216147929a7.html/ifrs

1Comperio IFRS can be purchased from the website – http://www.wendangku.net/doc/30f9293b0912a216147929a7.html/ifrs

2Only available as a pdf on our website

Contacting PricewaterhouseCoopers

Please contact your local PricewaterhouseCoopers of?ce to discuss how we can help you make the change to International Financial Reporting Standards or with technical queries. E-mail us at

corporatereporting@http://www.wendangku.net/doc/30f9293b0912a216147929a7.html

x Similarities and Differences – A comparison of IFRS and US GAAP – February 20041

Contents Page

Preface i

Introduction

普华永道_IFRS USGAAP 比较(英文版)

ii Convergence 1

Summary of similarities and differences 4

Accounting framework 13

Financial statements 15

Consolidated ?nancial statements 22

Business combinations 29

Revenue recognition 35

Expense recognition 39

Assets 43

Liabilities 55

Equity 63

Derivatives and hedging 64

Other accounting and reporting issues 67

Earnings per share 67

Related party transactions 68

Segment reporting 69

Discontinuing/discontinued operations 71

Post balance sheet events 72

Interim ?nancial reporting 73

Index 74

Contents This publication will be updated following the release of the ?nal standards that will be

mandatory from 1 January 2005. This edition is up to date as at 31 December 2003.

PRINT (NOTE:contains 48 pages)

普华永道_IFRS USGAAP 比较(英文版)

P

普华永道_IFRS USGAAP 比较(英文版)

普华永道_IFRS USGAAP 比较(英文版)

r e f a c e i Similarities and Differences – A comparison of IFRS and US GAAP – February 2004

Preface International Financial Reporting Standards (IFRS) will be adopted for the ?rst time in 2005 in many countries around the world including, for listed companies initially, in the EU. The International Accounting Standards Board (IASB) has been busy putting in place a stable platform of IFRS for ?rst-time adopters. Since 2002 the IASB and the US Financial Accounting Standards Board (FASB) have been committed to working towards converging the two frameworks. Despite convergence initiatives, there are many differences between the two frameworks, which this publication seeks to highlight.There have been many changes in IFRS and US GAAP since the 2001 version of this publication. This revised edition of the publication provides a means by which companies can quickly identify key similarities and differences between IFRS and US GAAP.Developments under both frameworks are ongoing, and this publication will be updated in the second quarter of 2004, when it will fully re?ect the ?nal standards required for 2005.To assist you in keeping pace with the changes, I hope you ?nd this latest version of the publication useful in identifying the similarities and differences that exist between IFRS and US GAAP.Ian Wright Global Corporate Reporting Leader

PricewaterhouseCoopers

Introduction Similarities and Differences – A comparison of IFRS and US GAAP – February 2004ii

Introduction

This publication by PricewaterhouseCoopers is for those who wish to gain a broad understanding of the key

similarities and differences between IFRS and US GAAP . The ?rst section provides details of convergence initiatives between the two frameworks. The next section provides a summary of the similarities and differences between IFRS and US GAAP and then refers to individual sections where key divergences are highlighted and the likely impact of recent proposals explained.

No summary publication can do justice to the many differences of detail that exist between IFRS and

US GAAP . Even if the guidance is similar there can be differences in the detailed application, which could have a material impact on the ?nancial statements. In this publication we have focused on the measurement similarities and differences most commonly found in practice. When applying the individual accounting frameworks, readers must consult all the relevant accounting standards and, where applicable, their national law. Listed companies must also follow relevant securities regulations, for example the US Securities and Exchange Commission requirements and local stock exchange listing rules.

This publication takes account of authoritative pronouncements issued under IFRS and US GAAP up to

31 December 2003 and is based on the most recent version of those pronouncements, should an earlier version of a pronouncement still be operative at the date of this publication.

普华永道_IFRS USGAAP 比较(英文版)

普华永道_IFRS USGAAP 比较(英文版)

Convergence The following key initiatives aim to further the goal of convergence between IFRS and US GAAP in addition to the IASB and the FASB’s monitoring of the activities of the other boards and their explicit consideration of the other board’s agenda decisions:Joint projects . Joint projects are the projects that both boards have agreed to conduct simultaneously in a co-ordinated manner. Joint projects involve sharing staff resources, and every effort is made to keep joint projects to a similar time schedule. Currently, the IASB and the FASB are conducting joint projects to address revenue recognition and business combinations.The short-term convergence project . The short-term convergence project is an active agenda project that is being conducted jointly between the IASB and the FASB. The scope of the short-term convergence project is limited to those differences between IFRS and US GAAP in which convergence around a high-quality solution appears achievable in the short-term. Because of the nature of the differences, it is expected that a high-quality solution can usually be achieved by selecting either existing IFRS or US GAAP .The convergence research project . The FASB staff are currently working on a research project related to convergence. The project seeks to identify all of the substantive differences between US GAAP and IFRS and to catalogue those differences. The project scope includes differences in standards addressing recognition,measurement, presentation and disclosure. Any topic in which a speci?c accounting treatment would be permissible under one basis of accounting but would not be permissible under the other basis of accounting is included in the project scope.While signi?cant progress towards international convergence is expected to be made in the next few years, the volume of differences and the complex nature of some issues means that many differences between IFRS and US GAAP will persist well beyond 2005.Short-term convergence In September 2002, the IASB and the FASB agreed to add a short-term convergence project to their active agendas. The objective of the project is to remove a variety of differences between IFRS and US GAAP. The project’s scope is limited to those differences in which convergence around a high-quality solution can be achieved in the short term,usually by selecting between existing IFRS and US GAAP. The Boards intend to analyse each of the differences within the scope and either amend applicable IFRS or US GAAP literature to reduce or eliminate the difference, or communicate to each other its rationale for not electing to change current standards.Summary of Exposure Drafts to date The IASB issued ED 4, Disposal of Non-current Assets and Presentation of Discontinued Operations,in July 2003. It incorporates presentation requirements of FAS 144 for discontinued operations and speci?es that non-current assets that an entity intends to dispose of are classi?ed as held for sale and measured at the lower of carrying amount and fair value, less costs to sell.The FASB issued four exposure drafts in December 2003, as follows:?Proposed FAS, Accounting Changes and Error Corrections – a replacement of APB 20 and FAS 3,which would require retrospective application for changes in accounting principle, unless it is impracticable to determine either the cumulative effect or the period-speci?c effects of the change. This proposed Statement would require a change in depreciation method to be accounted for as a change in accounting estimate and not as a change in accounting principle. ?Proposed FAS, Earnings per Share – an amendment of FAS 128,which would require the number of incremental shares included in year-to-date diluted EPS to be computed using the average market price of common shares for the year-to-date period. It also would eliminate the provisions of Statement 128 that allow an entity to rebut the C

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普华永道_IFRS USGAAP 比较(英文版)

Convergence Summary of tentative decisions

presumption that contracts with the option of settling in either cash or stock will be settled in stock. Also, it would require that shares to be issued upon conversion of a mandatorily convertible security be included in the

computation of basic EPS from the date that conversion becomes mandatory.

?

普华永道_IFRS USGAAP 比较(英文版)

Proposed FAS, Exchanges of Productive Assets – an amendment of APB 29,which would eliminate the

exception to the general principle that exchanges of nonmonetary assets should be recorded at the fair value of the assets exchanged. It would require exchanges of productive assets to be accounted for based on the fair values of the assets involved, unless the exchange transaction does not have commercial substance. Commercial substance would be assessed by comparing the expected cash ?ows of the entity immediately before and immediately after the exchange.

?Proposed FAS, Inventory Costs – an amendment of ARB No. 43, Chapter 4,which would require that items such as idle facility expense, excessive spoilage, double freight and rehandling costs to be classi?ed

as current-period charges.

Classi?cation of liabilities on re?nancing A long-term ?nancial liability due to be settled within 12 months of the balance sheet date should be classi?ed as a current liability, unless an agreement to re?nance the

liability on a long-term basis is completed on or before the balance sheet date.

Classi?cation of liabilities due on demand because of violation of debt covenants A long-term ?nancial liability payable on demand at the balance sheet date because the entity breached a condition of its loan agreement should be classi?ed as current, unless:1. a grace period was agreed on and effected before the balance sheet date and that

the grace period must expire within 12 months (or operating cycle, if longer) of the

balance sheet date, and/or

2. (a) the lender has agreed on or before the balance sheet date to provide a period of

grace within which an entity can rectify the breach, (b) the obligation is not callable

during the period, and (c) either the entity recti?es the breach within the period of

grace or at the time that the ?nancial statements are issued, it is probable that the

breach will be recti?ed within the period of grace.

Provisions for restructuring costs The de?nition of constructive obligation is revised to clarify that the actions of an entity

must result in other parties being able to "reasonably rely" on the entity discharging its

responsibilities. The existence and announcement of a restructuring plan does not by

itself create an obligation. Costs that are often incurred in a restructuring are treated as

follows:

? The cost of terminating a contract before the end of its term should be recognised

when the entity terminates the contract

? The liability for costs that will continue to be incurred under a contract for its remaining

term without economic bene?t to the entity should be recognised in accordance with

the requirements for onerous contracts

? The recognition of involuntary termination bene?ts requires the communication of

those bene?ts to the employees

? When employees are required to render services beyond any noti?cation period to

be entitled to the termination bene?ts and those bene?ts are not paid pursuant to

any pre-existing bene?t arrangement (i.e. they are one time bene?ts), those bene?ts

should be recognised over the future service period

? Voluntary termination bene?ts are recognised when employees accept the offer

of voluntary termination.

Similarities and Differences – A comparison of IFRS and US GAAP – February 20042

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n c e Remaining issues to be discussed Pensions accounting This project will consider issues arising on: recognition of actuarial gains and losses, the asset ceiling, impact of asset ceiling on components recognised in income, expected return on plan assets, de?nition of de?ned bene?t plans, de?ned contribution plans and plan assets, the allocation of cost to accounting periods, net presentation in the balance sheet of plan assets and plan liabilities, additional disclosures related to plan assets,and a review of FAS 106 and FAS 112 to see if these requirements should be incorporated into IAS 19.Interim ?nancial reporting IFRS requires interim ?nancial reports to be prepared as if they covered a discrete period, with certain exceptions. US GAAP treats the interim period as an integral part of the annual report. The distinction has implications for the recognition of revenue and costs.Research and development US GAAP requires research and development costs to be expensed when incurred,except for certain software development costs, which are captialised if certain criteria are met. IFRS requires a distinction to be made between research and development,and requires development costs to be capitalised under certain http://www.wendangku.net/doc/30f9293b0912a216147929a7.htmlernment grants The IASB is aware that IAS 20 is out of date and should be reviewed in the light of FAS 116 and the joint revenue project.Long-term convergence projects Revenue recognition

普华永道_IFRS USGAAP 比较(英文版)

The primary objective is to develop a comprehensive set of principles for revenue recognition that will eliminate inconsistencies in the existing authoritative literature and accepted practices. Business combinations (Phase II)Within the scope of the application of the purchase method project are:? Issues relating to minority interest including the full goodwill model ? Treatment of a business combination achieved through successive share purchases ? Issues relating to the measurement of consideration: measurement date for equity instruments, date of acquisition, adjustments for the value of a block of securities issued, treatment of direct costs and contingent consideration ? Issues relating to the recognition and measurement of the identi?able net assets acquired, including restructuring provisions, acquired deferred tax assets, fair values of liabilities, assets expected to be disposed of and contingencies of the acquiree. Joint ventures Proportionate consolidation is permitted under IFRS.Except in very limited circumstances such as industry-speci?c situations, proportionate consolidation is not permitted. The equity method is required under US GAAP .Long-term convergence 3Similarities and Differences – A comparison of IFRS and US GAAP – February 2004

Summary of similarities and differences Similarities and Differences – A comparison of IFRS and US GAAP – February 20044SUBJECT IFRS US GAAP

普华永道_IFRS USGAAP 比较(英文版)

PAGE Historical cost Uses historical cost, but intangible assets,property plant and equipment (PPE) and investment property may be revalued.

Derivatives, biological assets and most

securities must be revalued.

No revaluations except some securities and derivatives at fair value.

13

Fair presentation override In extremely rare cases, entities should override the standards where essential to give a fair presentation.

Conceptually similar to IFRS,but not used in practice.

13

First-time adoption of accounting frameworks Requires full retrospective application of all IFRSs effective at the reporting date for an entity’s ?rst IFRS ?nancial statements.First-time adoption of US GAAP requires retrospective application. In addition,

particular standards specify treatment for

?rst-time adoption of those standards.

14Reporting currency Requires the measurement of pro?t using the functional currency; however,entities may present ?nancial statements

in a different currency.

Similar to IFRS.SEC rules allow non-US registrants to choose a reporting currency.

15

Components of ?nancial statements Two years’ balance sheets, income statements, cash ?ow statements, changes in equity and accounting policies and notes.

Similar to IFRS,except three years required for public companies for all

statements except balance sheet.

16Balance sheet Does not prescribe a particular format; an entity uses a liquidity presentation of assets and liabilities, instead of a current/non-current presentation, only when a liquidity presentation provides more relevant and reliable information. Certain items must be presented on the face of the balance sheet.Entities may present either a classi?ed or non-classi?ed balance sheet. Items

presented on the face of the balance sheet

are generally presented in decreasing

order of liquidity. Public companies must

follow SEC guidelines regarding minimum

disclosure requirements.

17

Extraordinary items Prohibited.De?ned as being both infrequent and unusual, and are rare. Negative goodwill

is presented as an extraordinary item.

18

Statement of recognised gains and losses/other comprehensive income Separate the statement of recognised gains and losses as either in notes or separately highlighted in primary statement of changes in shareholder equity.Disclose total comprehensive income and accumulated other comprehensive

income, either as a separate primary

statement or combined with income

statement, or with statement of changes

in stockholders’ equity.

19Income statement format Does not prescribe a standard format,although expenditure must be presented in one of two formats (function or nature).

Certain items must be presented on the face of the income statement.Present as either a single-step or multiple-step format.

Expenditure must be presented by

function.

18

Exceptional items Does not use the term, but requires separate disclosure of items that are of such size, incidence or nature that require

separate disclosure to explain the performance of the entity.Disclose on the face of the income statement or in the notes.

Similar to IFRS,but individually signi?cant

items should be presented on the face of

the income statement.

18

Summary of similarities and differences

Financial statements

Accounting framework

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5Similarities and Differences – A comparison of IFRS and US GAAP – February 2004Statement of changes in shareholders’ equity Statement showing capital transactions

普华永道_IFRS USGAAP 比较(英文版)

with owners, the movement in accumulated pro?t and a reconciliation of all other components of equity. The statement must

普华永道_IFRS USGAAP 比较(英文版)

be presented as a primary statement.Similar to IFRS.19Cash ?ow statements – format and method Standard headings, but limited ?exibility of contents. Use direct or indirect method.Similar headings to IFRS,but more speci?c guidance given for items included in each category. Use direct or indirect method.20Cash ?ow statements – de?nition of cash and cash equivalents Cash includes overdrafts and cash equivalents with short-term maturities (less than 3 months). Cash excludes overdrafts but includes cash equivalents with short-term maturities. 20Cash ?ow statements – exemptions No exemptions.Limited exemptions for certain investment entities.20Changes in accounting policies Restate comparatives and prior-year opening retained earnings.Generally include effect in current-year income statement. Disclose pro-forma comparatives. Retrospective adjustments for speci?c items.21Correction of errors Restate comparatives. Similar to IFRS.21Changes in accounting estimates Reported in income statement in the current period.Similar to IFRS.21De?nition of subsidiary Based on voting control or power to govern. The existence of currently exercisable potential voting rights also needs to be taken into consideration.Controlling interest through majority ownership of voting shares or by contract.Also, variable interest entities (VIEs) in which a parent does not have voting control but absorbs the majority of losses or returns must also be consolidated. 22Special purposes entities (SPEs)Consolidate where the substance of the relationship indicates control.SPEs must be consolidated if consolidation requirements for VIEs are met. To avoid consolidation, the SPE must be a qualifying SPE.22Non-consolidation of subsidiaries Only if the subsidiary is acquired and held for re-sale within one year of use. Dissimilar activities are not a justi?cation.Only if control does not rest with the majority owner.23De?nition of associate Based on signi?cant in?uence: presumed if 20% interest or participation in entity’s affairs.Similar to IFRS.24Presentation of associate results Use equity method. Show share of post-tax result.Similar to IFRS.24Disclosures about signi?cant associates Give detailed information on signi?cant associates’ assets, liabilities, revenue and results.Similar to IFRS.24SUBJECT IFRS US GAAP PAGE Financial statements Consolidated ?nancial statements

Summary of similarities and differences Presentation of joint ventures Both proportional consolidation and equity method permitted.Equity method is required except in speci?c circumstances.

25Foreign currency translation – individual companies Translate transactions at rate on date of transaction; monetary assets/liabilities at

balance sheet rate; non-monetary items at

historical rate.

Similar to IFRS.27Foreign entities within

普华永道_IFRS USGAAP 比较(英文版)

consolidated ?nancial statements Use closing rate for balance sheets;average rate for income statements. Take

普华永道_IFRS USGAAP 比较(英文版)

exchange differences to equity. Include in

gain or loss on disposal of a subsidiary.

Similar to IFRS.27Hyperin?ation – foreign entity Adjust local statements of foreign entity to current price levels prior to translation.Remeasure local currency statements using the reporting currency as the

functional currency.

28Types Virtually all are acquisitions. Uniting of interests/pooling severely restricted.All business combinations are acquisitions.

29

Purchase method – fair values on acquisition Fair value the assets and liabilities of acquired entity. Some restructuring liabilities relating solely to the acquired entity may be recognised in fair value exercise if speci?c criteria about restructuring plans are met. Similar to IFRS, but speci?c rules for acquired in-process research and

development (generally expensed).

Similar to IFRS,but less stringent

recognition criteria regarding timing of

?nalisation of the plan.

29Purchase method –contingent consideration Estimated at acquisition then subsequently corrected against goodwill.Not recognised until the contingency is resolved or the amount is determinable.

29Purchase method – minority interests at acquisition State at share of fair value of net assets or at share of pre-acquisition carrying value of net assets.

Generally state at share of pre-acquisition carrying value of net assets.

30Purchase method –subsequent adjustments to fair values Fair values can be corrected against goodwill up to the end of the year after acquisition, if additional evidence of values becomes available. Record subsequent adjustments in income statement. Reversals of acquisition provisions always adjust goodwill.

Similar to IFRS. However, allocation period is up to one year following the date of the

acquisition. Once the fair value allocation

is ?nalised, no further changes are

permitted except for the resolution of

known pre-acquisition contingencies.

Adjustments made during the allocation

period relating to data for which

management was waiting to complete the

allocation are recorded against goodwill

Similar to IFRS with speci?c exceptions.

31SUBJECT IFRS US GAAP PAGE Consolidated ?nancial statements (continued)

Business combinations

Purchase method – goodwill and intangible assets Capitalise and amortise over useful life,normally not longer than 20 years.Capitalise but do not amortise. Certain contractual and/or separable intangible

assets with ?nite lives are required to be

amortised. Goodwill and inde?nite-lived

intangible assets should be reviewed for

impairment at least annually at the

reporting unit level.

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7Similarities and Differences – A comparison of IFRS and US GAAP – February 2004Purchase method –negative goodwill If it relates to expected future losses/costs,recognise in the income statement when it occurs. Otherwise record as negative asset and recognise over useful lives of identi?able, non-monetary assets. Any excess over the fair value of such assets is recognised in the income statement immediately.Reduce proportionately the fair values assigned to non-current assets (with certain exceptions). Any excess is recognised in the income statement immediately as an extraordinary gain.31Uniting of interests method Virtually all business combinations are acquisitions. Entities are required to explore all avenues to identify an acquiror.

普华永道_IFRS USGAAP 比较(英文版)

Prohibited.34Revenue recognition

普华永道_IFRS USGAAP 比较(英文版)

Based on several criteria, which require the recognition of revenue when risks and rewards have been transferred and the revenue can be measured reliably.Four key criteria. In principle, similar to IFRS.Extensive detailed guidance exists for speci?c transactions.35Construction contracts Accounted for using the percentage of completion method. Completed contract method prohibited.Percentage of completion method is preferable; however, completed contract method permitted in rare circumstances.37Interest expense Interest expense recognised on an accrual basis. Effective yield method used to amortise non-cash ?nance charges.Similar to IFRS .39Employee bene?ts –pension costs – de?ned bene?t plans Must use projected unit credit method to determine bene?t obligation. Similar to IFRS conceptually, although several differences in detail.39Employee share compensation Disclosures required but no guidance on recognition and measurement. Two alternative methods for determining cost: intrinsic value (market price at measurement date less any employee contribution or exercise price) or fair value at issue using option pricing model.Recognise cost of share awards or options over period of employee’s performance.41Employee bene?ts – other Account for post-retirement bene?ts as pensions. Rules also given for termination bene?ts arising from redundancies and other post-employment and long-term employee bene?ts. Account for termination indemnity plans as pensions.Similar to IFRS for post-retirement bene?ts. More detailed guidance given for termination bene?ts. Termination indemnity accounted for as pension plans and calculated as either the vested bene?t obligation or the actuarial present value of the vested bene?ts. 42SUBJECT IFRS US GAAP PAGE Business combinations (continued)Revenue recognition Expense recognition Purchase method –disclosure Disclosures include names and descriptions of combining entities, method of accounting for acquisition, date of acquisition, summary of fair values of assets and liabilities acquired, and impact on results and ?nancial position of acquirer.Similar to IFRS,plus additional disclosures regarding the reasons for the acquisition,and details of allocations. Public companies must also present pro-forma income statement information as if acquisition occurred at start of comparative period.32

Summary of similarities and differences Acquired intangible assets Capitalise if recognition criteria are met;intangible assets must be amortised over useful life, normally no longer than 20 years. Revaluations are permitted in

普华永道_IFRS USGAAP 比较(英文版)

rare circumstances.Capitalise purchased intangible assets, amortise over useful life and review for

impairment. Intangibles assigned an

普华永道_IFRS USGAAP 比较(英文版)

inde?nite useful life must be not be

amortised but reviewed for impairment

annually.

Revaluations are not permitted.

43

Internally generated intangible assets Expense research costs as incurred.Capitalise and amortise development costs only if stringent criteria are met.Expense both research and development costs as incurred. Some software and

website development costs must be

capitalised.

44Property, plant and equipment Use historical cost or revalued amounts.Frequent valuations of entire classes of

assets are required when revaluation

option is chosen.

Revaluations not permitted.45Leases – classi?cation It is a ?nance lease if substantially all risks and rewards of ownership transferred.Substance rather than form is important.

Similar to IFRS,but considerably more extensive form-driven requirements.

47

Leases – lessor accounting Record amounts due under ?nance leases as a receivable. Allocate gross earnings to give constant rate of return based on

(pre-tax) net investment method.

Similar to IFRS,but speci?c rules for leveraged leases.

47

Capitalisation of borrowing costs Permitted, but not required, for qualifying assets.

Required. 49Investment property Measure at depreciated cost or fair value and recognise changes in fair value in the income statement.

Treat the same as for other properties (depreciated cost).

49

Impairment of assets If impairment indicated, write down assets to higher of net selling price and value in use based on discounted cash ?ows. If no loss arises, reconsider useful lives of those assets. Reversals of losses permitted in certain circumstances. For assets to be held and used,impairment is assessed on undiscounted

cash ?ows. If less than carrying amount,

measure impairment loss using market

value or discounted cash ?ows. Reversals

of losses prohibited.

For assets held for disposal, impairment

is based on lower of carrying amount and

fair value less cost to sell. Assets held for

disposal are not depreciated or amortised

during selling period.

48

Inventories Carry at lower of cost and net realisable value. Use FIFO or weighted average method to determine cost. LIFO prohibited.

Reversal is required for subsequent increase in value of previous write-downs.

Similar to IFRS; however, use of LIFO permitted.

Reversal of write-down is prohibited.

50

Biological assets Measured at fair value less estimated point-of-sale costs.Not speci?ed. Generally historical cost used.

51

SUBJECT IFRS US GAAP PAGE Assets

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9Similarities and Differences – A comparison of IFRS and US GAAP – February 2004Financial assets –measurement

普华永道_IFRS USGAAP 比较(英文版)

Depends on classi?cation of investment – if held to maturity or originated by the entity,then carry at amortised cost, otherwise at

普华永道_IFRS USGAAP 比较(英文版)

fair value. Unrealised gains/losses on trading securities recognised in the income statement and on available-for-sale investments recognised in equity.Similar to IFRS.51Derecognition of ?nancial assets Derecognise ?nancial assets based on risks and rewards ?rst; control is secondary test.Derecognise based on control. Legal isolation of assets even in bankruptcy is necessary for derecognition.54Provisions – general Record the provisions relating to present obligations from past events if out?ow of resources is probable and can be reliably estimated. Similar to IFRS,with rules for speci?c situations (employee termination costs,environmental liabilities, loss contingencies, etc). 55Provisions – restructuring Recognise restructuring provisions if detailed formal plan announced or implementation effectively begun.Recognition of a liability based solely on commitment to a plan is prohibited. Must meet the de?nition of a liability, including certain criteria regarding the likelihood that no changes will be made to the plan or that the plan will be withdrawn.55Contingencies Disclose unrecognised possible losses and probable gains.Similar to IFRS. 56Deferred income taxes –general approach Use full provision method (some exceptions) driven by balance sheet temporary differences. Recognise deferred tax assets if recovery is probable.Similar to IFRS,but recognise all deferred tax assets and then provide valuation allowance if recovery is less than 50%likely.A number of speci?c differences in application.57Deferred income taxes –main exceptions Non-deductible goodwill and temporary differences on initial recognition of assets and liabilities that do not impact on accounting or taxable pro?t.Similar to IFRS regarding non-deductible goodwill. Initial recognition exemption does not exist in US GAAP.57Government grants Recognise as deferred income and amortise. Entities may offset capital grants against asset values.Similar to IFRS except long-lived asset contributions recorded as revenue.59Leases – lessee accounting Record ?nance leases as asset and obligation for future rentals. Normally depreciate over useful life of asset.Apportion rental payments to give constant interest rate on outstanding obligation.Generally charge operating lease rentals on straight-line basis. Similar to IFRS . Speci?c rules must be met to record a ?nance or capital lease.59SUBJECT IFRS US GAAP PAGE Assets (continued)Liabilities

Summary of similarities and differences Similarities and Differences – A comparison of IFRS and US GAAP – February 200410Leases – lessee accounting – sale and leaseback transactions

普华永道_IFRS USGAAP 比较(英文版)

For a ?nance lease, defer and amortise pro?t arising on sale and ?nance

普华永道_IFRS USGAAP 比较(英文版)

leaseback. If an operating lease arises then pro?t recognition depends on sale proceeds compared to fair value of the asset. Also need to consider substance/linkage of the transactions.

Timing of pro?t and loss recognition depends on whether seller relinquishes

substantially all or a minor part of the use

of the asset. Immediately recognise losses.

Consider speci?c strict criteria if a property

transaction.

60Financial liabilities –classi?cation Classify capital instruments depending on substance of the issuer’s obligations. Mandatorily redeemable preference shares are classi?ed as liabilities.Generally where an instrument is not a share, classify as liability when obligation

to transfer economic bene?t exists.

Similar to IFRS.

61Convertible debt Account for convertible debt on split basis,allocating proceeds between equity and debt.

Convertible debt is usually recognised as a liability.

62

Derecognition of ?nancial liabilities Derecognise liabilities when extinguished.The difference between the carrying

amount and the amount paid is recognised

in the income statement.

Similar to IFRS.62Capital instruments –purchase of own shares

Show as deduction from equity.Similar to IFRS.63Derivatives and other ?nancial instruments –measurement of ?nancial instruments and hedging activities Measure derivatives and hedge instruments at fair value; recognise changes in fair value in income statement except for effective cash ?ow hedges,

where the changes are deferred in equity

until effect of the underlying transaction is

recognised in the income statement.

Gains/losses from hedge instruments that

are used to hedge forecast transaction may

be included in cost of non-?nancial

asset/liability (basis adjustment).

Similar to IFRS,except no “basis adjustment” on cash ?ow hedges

of forecast transactions.

64Derivatives and other ?nancial instruments –measurement of hedges of foreign entity investments Gains/losses on hedges of foreign entity investments are recognised in equity,including hedge ineffectiveness on non-derivatives. For derivatives, record hedge

ineffectiveness in the income statement.

Gains/losses held in equity must be

transferred to the income statement on

disposal of investment.

Similar to IFRS,except all hedge ineffectiveness is recognised in the

income statement.

66SUBJECT IFRS US GAAP PAGE Liabilities (continued)

Equity instruments

Derivatives and hedging

S

u m m a r y

o f s i

m i l a r i t i e s

a n d d i f f e r e n

c e s

11Similarities and Differences – A comparison of IFRS and US GAAP – February 2004Related party transactions – de?nition Determine by level of direct or indirect control, joint control and signi?cant in?uence of one party over another or common control of both parties.Similar to IFRS.68Related party transactions –

普华永道_IFRS USGAAP 比较(英文版)

disclosures Disclose name of related party and nature of relationship and types of transaction. For control relationships, give disclosures

普华永道_IFRS USGAAP 比较(英文版)

regardless of whether transactions occur. Some exemptions available for separate ?nancial statements of subsidiaries.Similar to IFRS.Exemptions are narrower than under IFRS.68Segment reporting – scope and basis of formats Public entities: report primary and secondary (business and geographic)segments based on risks and returns and internal reporting structure.Public entities: report based on operating segments and the way the chief operating decision-maker evaluates ?nancial information for purposes of allocating resources and assessing performance. 69Segment reporting – accounting policies Use group accounting http://www.wendangku.net/doc/30f9293b0912a216147929a7.htmle internal ?nancial reporting policies (even if accounting policies differ from group accounting policy).69Segment reporting – disclosures Disclosures for primary segment include revenues, results, capex, total assets and liabilities, and other items. For secondary segment, report revenues, total assets and capex.Similar disclosures to IFRS (primary segment) except liabilities and geographical capex not required.Depreciation, amortisation, tax, interest and exceptional/extraordinary items disclosed if reported internally. Disclosure of factors used to identify segments is required.70Discontinuing operations –de?nition Separate major http://www.wendangku.net/doc/30f9293b0912a216147929a7.htmlponent that is clearly distinguishable operationally and for ?nancial reporting:reportable segment, operating segment,reporting unit, subsidiary or asset grouping.71Discontinuing/discontinued operations – measurement Make provisions for some costs when criteria for recognising a restructuring provision are met.Write down assets to higher of net selling price and value in use based on discounted cash ?ows.Results of operations of a discontinued or held-for-sale component and any gain/loss are reported in discontinued operations in the periods they occur; not accrued in advance. Carry assets at lower of carrying amount or fair value less cost to sell. 71Discontinuing/discontinued operations – presentation and main disclosures Give details of discontinuing operation.Disclose (on face of the income statement)pre-tax gain or loss from discontinuance. Report discontinued and held-for-sale operations as a separate line item on face of the income statement before extraordinary items and cumulative effect of accounting changes. Assets and liabilities of held-for-sale disposal groups segregated on balance sheet.72SUBJECT IFRS US GAAP PAGE Other accounting and reporting topics Earnings per share – diluted Use weighted average potential dilutive shares as denominator for diluted EPS. Use “treasury stock” method for share options/warrants.Similar to I FRS.67

Summary of similarities and differences Similarities and Differences – A comparison of IFRS and US GAAP – February 200412Interim ?nancial reporting Not mandatory to prepare interim statements but must use the standard if do prepare. Basis should be consistent with full year statements and include comparatives.If issued, the contents of interim statements are prescribed and the basis must be

consistent with full year statements.

Quarterly reporting is required for SEC

registrants (domestic US entities only).

普华永道_IFRS USGAAP 比较(英文版)

73

SUBJECT IFRS

普华永道_IFRS USGAAP 比较(英文版)

US GAAP PAGE Other accounting and reporting topics (continued)

Post balance sheet events Adjust ?nancial statements for subsequent events, providing evidence of conditions at

balance sheet date and materially affecting

amounts in ?nancial statements (adjusting

events). Disclose non-adjusting events.

Similar to IFRS.72

普华永道_IFRS USGAAP 比较(英文版)

普华永道_IFRS USGAAP 比较(英文版)

Accounting framework Conceptual framework IFRS and US GAAP each include a conceptual framework. The principles set out in the two frameworks provide a basis for setting accounting standards, and a point of reference for the preparation of ?nancial information where no speci?c guidance exists. Qualitative characteristics of ?nancial information IFRS Financial information must possess certain characteristics for it to be useful. The IFRS Framework requires that ?nancial information must be understandable, relevant, reliable and http://www.wendangku.net/doc/30f9293b0912a216147929a7.html GAAP A series of concept statements set out similar characteristics to IFRS , with greater emphasis placed on the consistency of ?nancial information.Reporting elements IFRS The IFRS Framework presents ?ve reporting elements: assets, liabilities, equity, income (includes revenues and gains) and expenses (includes losses).Assets are resources controlled from a past event. Liabilities are present obligations arising from a past event. Assets and liabilities are recognised on the balance sheet when it is “probable” that economic bene?ts will ?ow in to or out from the entity, and those bene?ts must be able to be measured reliably.Equity is the residual interest in the assets after deducting the entity’s liabilities. Income is increases in economic bene?ts that result in increases in equity other than those relating to contributions from equity participants. Expenses are decreases in economic bene?ts that result in decreases in equity other than those relating to distributions to equity http://www.wendangku.net/doc/30f9293b0912a216147929a7.html GAAP Reporting elements and the de?nition and recognition criteria are similar to IFRS. US GAAP concept statements contain additional elements: investments by and distributions to owners, comprehensive income and fair value measurements used in accounting. Other comprehensive income includes all changes in equity during a period, except those resulting from investments by and distributions to owners. Historical cost IFRS Historical cost is the main accounting convention. However, IFRS permits the revaluation of intangible assets, PPE and investment property. IFRS also requires fair valuation of certain categories of ?nancial instruments and certain biological http://www.wendangku.net/doc/30f9293b0912a216147929a7.html GAAP Prohibits revaluations except for certain categories of ?nancial instrument, which have to be carried at fair value. Fair presentation override IFRS Entities may depart from a standard in extremely rare circumstances in which management concludes that compliance with a requirement in an IFRS or an Interpretation of a Standard would be so misleading that it would con?ict with the objective of ?nancial statements set out in the Framework for the Preparation and Presentation of Financial Statements. IFRS requires disclosure of the nature of and the reason for the departure and the ?nancial impact of the departure. The override does not apply where there is a con?ict between local company law and IFRS ; in such a situation, the IFRS requirements must be applied. US GAAP Extremely rare in practice. SEC will generally not accept such an override.A

c c o u n t i n g f r a m e w o r k 13Similarities an

d Differences – A comparison of IFRS and US GAAP – February 2004

Accounting framework Similarities and Differences – A comparison of IFRS and US GAAP – February 200414

First-time adoption of accounting framework

IFRS First-time adoption of IFRS , as the primary accounting basis, requires full retrospective application of

all IFRSs effective at the reporting date for an entity’s ?rst IFRS ?nancial statements, with exemptions

primarily for property, plant and equipment and other assets, business combinations and pension plan

accounting. Comparative information must be prepared and presented on the basis of IFRS . Almost all

adjustments arising from the ?rst-time application of IFRS must be adjusted against opening retained

earnings of the ?rst period presented on an IFRS basis. Some adjustments are made against goodwill

or against other classes of equity.

US GAAP Accounting principles must be consistent for ?nancial information presented in comparative ?nancial

statements. US GAAP does not give any speci?c guidance on ?rst-time adoption of its accounting

framework. However, ?rst-time adoption of US GAAP requires full retrospective application. Particular

standards specify the transitional treatment upon ?rst-time application of a standard. Speci?c rules apply

for carve-out entities and ?rst-time preparation of ?nancial statements for the public.

REFERENCES:IFRS : Framework, IAS 1, IAS 8, IAS 16, IAS 38, IAS 39, IAS 40, IAS 41, IFRS 1.

US GAAP : CON 1-7,APB 20, FAS 115, FAS 130, FAS 133.

Conceptual framework (continued)

普华永道_IFRS USGAAP 比较(英文版)

普华永道_IFRS USGAAP 比较(英文版)