Chapter 4 - International financial reporting standards (Part I). The main goals of this chapter are to: Discuss the differences between IFRS and . GAAP, explain the major differences between IFRS and . GAAP on the recognition and measurement of assets, describe the IFRS requirements in a variety of disclosure and presentation standards,. | Chapter Topics Differences between IFRS and US GAAP. Inventories. Property, Plant & Equipment. Investment Property. Impairment of Assets. Intangible Assets. Goodwill. Borrowing Costs. Leases. Disclosure and Presentation Standards. Learning Objectives Discuss the differences between IFRS and . GAAP. Describe IFRS requirements for recognition and measurement of inventories; property, plant and equipment; intangibles and leased assets. Explain the major differences between IFRS and . GAAP on the recognition and measurement of assets. Describe the IFRS requirements in a variety of disclosure and presentation standards. Explain the major differences between IFRS and . GAAP on certain disclosure and presentation issues. Analyze the impact that the differences between IFRS and . GAAP can have on financial statements. Definitions. Recognition. Measurement. Alternatives. Lack of requirements or guidance. Presentation. Disclosure. Learning Objective 1 IFRS more flexible in many cases: Choice of alternatives. Less guidance leads to more judgment in applying IFRS. Learning Objective 1 Initial cost. Cost formulas to allocate cost of inventories to expense. Subsequent balance sheet measurement. Learning Objective 2 Costs included: Cost of purchase (purchase price and direct acquisition costs). Conversion costs (labor and overhead). Other costs (design, interest if takes time to bring to saleable condition). Costs excluded: Abnormal waste. Storage unless necessary for production process. Purely administrative overhead. Selling costs. Learning Objective 2 Cost formulas: No LIFO! Must use same cost formula for similar inventory items. Must report on balance sheet at lower of cost or net realizable value: Unlike . GAAP which uses lower of cost or market. NRV = estimated selling price less costs of completion and other costs to make sale. Learning Objectives 2 and 3 Historic cost is constant over the life of the inventory. . GAAP—market = replacement cost: . | Chapter Topics Differences between IFRS and US GAAP. Inventories. Property, Plant & Equipment. Investment Property. Impairment of Assets. Intangible Assets. Goodwill. Borrowing Costs. Leases. Disclosure and Presentation Standards. Learning Objectives Discuss the differences between IFRS and . GAAP. Describe IFRS requirements for recognition and measurement of inventories; property, plant and equipment; intangibles and leased assets. Explain the major differences between IFRS and . GAAP on the recognition and measurement of assets. Describe the IFRS requirements in a variety of disclosure and presentation standards. Explain the major differences between IFRS and . GAAP on certain disclosure and presentation issues. Analyze the impact that the differences between IFRS and . GAAP can have on financial statements. Definitions. Recognition. Measurement. Alternatives. Lack of requirements or guidance. Presentation. Disclosure. Learning Objective 1 IFRS more flexible in many
