IFRS vs US GAAP – Part 1

Jeff-Mike Smith Sule CIA, FRIAcc, EnP, REB, REA, CPA, MICB
Lecturer
The Momentum Towards Global IFRS Adoption

Top 10 Global Capital

Markets
US US GAAP
Japan Converting to IFRS
UK IFRS
France IFRS
Canada Converting to IFRS
Germany IFRS
Hong Kong IFRS
Spain IFRS
Switzerland IFRS or US GAAP
Australia IFRS

Countries that require or permit IFRSs

Countries seeking convergence with the IASB on pursuing adoption of IFRSs
 Terminology – US GAAP vs. IFRS

US GAAP IFRS
British English
US English (+ languages of all countries adopting
IFRS – some multiple)
Accounts receivable Debtors
Accounts payable Creditors
Inventory Stocks
Sales Turnover
Common Stock Share Capital

Additional Paid In Capital Share Issue Premium

Retained Earnings Revenue Reserves

 Major Differences – US GAAP vs. IFRS

US GAAP IFRS
Many specialized Minimal special
Industry focus
industries industry focus

*Separate GAAP
Yes No
for nonprofits
Nonpublic
Limited No
company focus
Special rules, Special rules,
Interim
interims often interims not
financials
regular dates regular dates
 Major Differences – US GAAP vs. IFRS

US GAAP IFRS
Not required,
Comparative Statements except SEC public 2 years
co. requirements
Fair Value – FAS 157 & 159 or
Yes Yes
equivalent
VIESs, SPEs or equivalent –
VIEs SPEs
FIN 46R, etc.
Uncertainty in Income Taxes
Yes Limited
– FIN 48
Revenue recognition Much detail Limited
(excludes ASU 2014-09) (>15 industries) detail
 Major Differences – US GAAP vs. IFRS

US GAAP IFRS
Derivates – netting FV
for derivative and
related right to reclaim
Not Permitted Not permitted
collateral with same
counterparty under
master agreement
Power Governance
Consolidation basis
(management) (ownership)
Capitalize and Capitalize and
Borrowing costs
amortize amortize
IFRS vs US GAAP

Jeff-Mike Smith Sule CIA, FRIAcc, EnP, REB, REA, CPA, MICB
Lecturer