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Ifrs Vs U.S Gaap Essay

2618 words - 11 pages

Differences between IFRS and U.S GAAP
Duoyi Zhang
(1)
| Issue: |Measurement basis of agricultural crops, livestock, orchards, |
| |forests. |
|1.IFRS IAS 41, Para 10-33 |Fair value with value changes recognized in profit or loss. |
|2.U.S GAAP |Historical cost is generally used. However, fair value less |
|ASC 905-330-35-3 |costs to sell is ...view middle of the document...

Effect of convergence on US financial statements, ratios, |FMV Realized |
|and decisions |Beginning inventory 38,380 41,218 |
| |Ending inventory (42,360) (45,596) |
| |Other costs 10,000 |
| |10,000 |
| |Total costs 6,020 |
| |5,622 |
| |So, it is clear that use this method, we can get higher costs |
| |no matter fair market value is less or greater than realized |
| |costs, and higher costs means lower tax liability. |
| |US—this is tax-reducing method. U.S. attitude has been to |
| |support agriculture and gives more tax benefits to agriculture|
|5. Cultural Driver |business. |
| |IFRS—No tax benefits. Market price decides tax. |

(2)
| Issue: |Impairment of debt and equity securities |
|1.IFRS IAS 39, Para 58 |Focus is on ‘loss events’ that provide objective evidence of |
| |impairment. |
|2.U.S GAAP |Impairment is only recognized only when the decline in fair |
|ASC: 320-10-S99-1 |value is considered other-than- temporary. Several different |
| |sources of literature provide guidance on when a security is |
| |considered other-than-temporarily impaired. |
| |US- the investor shall provide meaningful disclosure about |
|3. Underlying theoretical difference |individually significant unrealized losses. |
| ...

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