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ACC 533 - IFRS v GAAP
IFRS v GAAP, Advanced Topics in Financial Reporting
27
Accounting
Graduate
11/02/2010

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Term
gaap "market"
Definition
replacement cost bounded by NRV (sell price - cost to sell) and NRV - normal profit margin
Term
ifrs "market"
Definition
NRV (sell price - cost to sell)
Term
gaap acceptable inventory methods
Definition
lifo, fifo, weighted average, specific identification
Term
ifrs acceptable inventory methods
Definition
fifo, weighted average, specific identification
Term
describe write downs and write ups in gaap
Definition
write downs of inventory to lower of cost or market create a new cost basis that cannot be reversed
Term
describe write downs and write ups in ifrs
Definition
previously recognized write downs may be reversed up to the amount of previous write down if reason for impairment no longer exists
Term
gaap requires expense of development costs except...
Definition
computer software developed for external use are capitalized once technological feasibility established
Term
ifrs and development costs
Definition
allows all development costs to be capitalized when technical AND economic (commercial) feasibility of a project can be demonstrated
Term
does gaap allow reclassifying ST loans as LT? when?
Definition
yes as long as the entity intends to refinance the loan on a long-term basis AND, prior to issuing the FS, the entity can demonstrate an ability to refinance the loan
Term
does ifrs allow reclassifying ST loans as LT? when
Definition
yes, only if before the BS date
Term
gaap and depreciation of asset components
Definition
allows depreciation of components, but this is not a common practice
Term
ifrs and depreciation of asset components
Definition
requires depreciation of components
Term
does ifrs allow revaluation of long-lived assets? what method?
Definition
yes, proportional method: (new value / BV) = %. (HC x %) - (depr exp x %) = new BV.
Term
does gaap allow revaluation of long-lived assets? what method?
Definition
hail naw
Term
impairment of op assets, ifrs. when is "test" performed and what is it?
Definition
performed if impairment indicators exist. Loss = CV - recoverable amount (equal to higher of (FV - cost to sell) and (PV FCFs, including disposal value)
Term
impairment of op assets, gaap. when is the test done and what is it?
Definition
done yearly? 1] CV vs. Undisc FCFs. 2] CV - FV.
Term
does gaap allow revaluation of intangible assets? how?
Definition
hail naw it dont
Term
does ifrs allow revaluation of intangible assets? how?
Definition
fuck yes it does if there's an active market for the asset and it isn't goodwill. depreciate the asset for the year, compare new CV to FV. send it to revaluation surplus.
Term
how does gaap require convertible debt to be recorded? does it separate the debt and equity portions?
Definition
it may be separated, but it isn't required (most don't). debit cash @ FV * 101 (or whatev), debit/credit disc/prem, credit bp @ FV
Term
how does ifrs require convertible debt be recorded? does it separate the debt and equity portions?
Definition
a firm must separate the debt and equity portions. debit cash @ FV * 101, credit BP @ FV * other typical non convertible, Credit plug for APIC
Term
what is the process for impairing goodwill under gaap?
Definition
1) CV (or BV of net A) vs. FV incl. Gwill

2) CVg (purch $ - [unit As - unit Ls]) vs. implied FVg
Term
what is the process of impairing goodwill under ifrs?
Definition
compare CV of cgu to Recoverable Amount (greater of (FV - cost to sell) and (PV of FCFs)
Term
how does gaap rule on DTAs?
Definition
requires recognition of full DTA, but valuation allowance reduces assets to the amount that is MORE LIKELY THAN NOT to be realized.
Term
how does ifrs rule on DTAs?
Definition
amounts are recognized only to the extent it is PROBABLE they will be realized
Term
does ifrs or gaap allow FS to be adjusted for a stock dividend declared after the BS date?
Definition
ifrs does not, gaap does
Term
describe gaap ruling on construction contracts
Definition
accounted for using the percentage of completion method (if certain criteria are met). otherwise, use completed contract method (no revs or exp or GP recognized til complete)
Term
describe ifrs ruling on construction contracts
Definition
accounted for using the percentage of completion method (if certain criteria are met). otherwise, revenue recognition limited to recoverable costs incurred (recognize rev and exp, but not GP til costs recovered)
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