Chapter 4 - International financial reporting standards: Part I. After reading the material in this chapter, you should be able to: Discuss the types of differences that exist between International Financial Reporting Standards (IFRS) and . generally accepted accounting principles (GAAP); describe IFRS requirements related to the recognition and measurement of assets, specifically inventories; property, plant, and equipment; intangibles; and leased assets;. | Chapter 4: International Financial Reporting Standards: Part I Learning Objectives Discuss the types of differences that exist between International Financial Reporting Standards (IFRS) and . generally accepted accounting principles (GAAP) Describe IFRS requirements related to the recognition and measurement of assets, specifically inventories; property, plant, and equipment; intangibles; and leased assets Explain major differences between IFRS and . GAAP on the recognition and measurement of assets Describe the requirements of IFRS in a variety of disclosure and presentation standards 4-2 2 Learning Objectives Explain major differences between IFRS and . GAAP on certain disclosure and presentation issues Analyze the impact that differences between IFRS and . GAAP can have on the financial statements 4-3 Types of Differences Between IFRS and . GAAP Definition differences Recognition differences Measurement differences Alternatives Lack of requirements or guidance Presentation differences Disclosure differences 4-4 IFRS and . GAAP IFRS more flexible in many cases Choice between alternative treatments in accounting IFRS generally have less bright-line guidance More judgment is required in applying IFRS IFRS is a principles-based accounting system: whereas . GAAP is a rules-based system 4-5 IAS 2, Inventories Provides more extensive guidance than . GAAP Cost of inventories include: Costs of purchase Costs of conversion Other costs design, interest if takes time to bring to saleable condition Cost of inventories exclude: Abnormal waste Storage unless necessary for the production process Administrative overhead Selling costs 4-6 IAS 2, Inventories Limited choice with regard to cost formulas Does not allow LIFO Standard cost method and retail method are acceptable only if they approximate cost as per IAS 2 Cost of inventories not ordinarily interchangeable and produced and segregated for specific projects should use specific identification An . | Chapter 4: International Financial Reporting Standards: Part I Learning Objectives Discuss the types of differences that exist between International Financial Reporting Standards (IFRS) and . generally accepted accounting principles (GAAP) Describe IFRS requirements related to the recognition and measurement of assets, specifically inventories; property, plant, and equipment; intangibles; and leased assets Explain major differences between IFRS and . GAAP on the recognition and measurement of assets Describe the requirements of IFRS in a variety of disclosure and presentation standards 4-2 2 Learning Objectives Explain major differences between IFRS and . GAAP on certain disclosure and presentation issues Analyze the impact that differences between IFRS and . GAAP can have on the financial statements 4-3 Types of Differences Between IFRS and . GAAP Definition differences Recognition differences Measurement differences Alternatives Lack of requirements or guidance .
