I'm waiting for my NASBA applicatin to leave the review/eval stage and finally get completed so I can schedule my FAR exam for end of July…I have been going 100 miles an hour preparing using Wiley, and I think they are really good at highlighting the major differences, including with respect to answering some questions that involve numbers… Here are my notes on the major differences:
Intangibles:
Both U.S. GAAP and IFRS do not allow reversal of goodwill impairment
IFRS allows to choose between controlling interest portion of goodwill or entire amount of goodwill on consolidated financial statements.
IFRS allows intangibles to be revalued to Fair Value if there is an active market for those intangibles (U.S. GAAP doesn't allow FV revaluations for intangibles)
IFRS allows recovery of impairment losses up to the original carrying value
IFRS: does single step impairment testing – at cash generating units – so lots little goodwills vs one goodwill under U.S. GAAP
Imprairement and IFRS:
Recoverable amount: the greater of FV less cost to sell OR Value in use (which is PV of cash flows).
Recovery is always limited to original carrying value less any accumulated depreciated that may have been taken
Gains that go over and above previous losses go to OCI
Inventory and IFRS:
No LIFO under IFRSE
IFRS allows only LC or NRV valuation
IFRS allows reversal of inventory write downs up to original cost
Ex: Yr 1 write down Cost 100 – Market – 80:
dr. loss/income account 20
cr. inventory
Yr 2 recovery Cost 80, Market 150
dr.Inventory 20
cr COGS 20
Are you seeing a pattern yet?
GOOD LUCK!
Depreciation: pain in the ass – you have to do it by component – so if they give you the total cost for a bus and then its engine and seats, you have to deduct those from total cost to calculate the depreciation based on the component's useful life and then add it all all together for the total dep.exp for the bus….
“The strongest of all warriors are these two — Time and Patience.” ― Leo Tolstoy (War and Peace)
.
