UPDATED

	GAAP	IFRS
Approach	“Rules” based	“Principle” Based
Basic F/S Elements	FASB: 10 elements	IASB: 5 elements  Assets, Liabilities, Equity, Income, Expense
Inventory	1-LIFO is OK 2-Impairment Loss not reversible 3-LCM vs Cost	1-No LIFO 2-Impairment Loss reverse OK 3-LC or NRV
Financial Statement Presentation	1-Extraordinary items required 2- Comparative info for prior year NOT required	1-NO extraordinary items allowed   2-Comparative info for prior year required   3-Required: Separate statement of Comprehensive income and changes in Equity
Stockholders’ Equity	1-Two methods for Treasury Stocks: Par Value, Cost methods	1-Three methods for Treasury Stocks: Par value, Cost method, Constructive Retirement
EPS	1- EPS based on Extraordinary Items are reported	1-EPS based on Extraordinary Items are NOT reported
Statement of Cash Flows	1-Interest received, interest paid, and dividend received: operating activities 2-Dividend Paid: financing activities	1.   Interest revenue and dividend revenue can be reported as either operating activity or investing activity. they are most commonly shown as investing activity.   2.   Interest paid can be reported as either operating activity or as a financing activity. They are most commonly shown as a financing activity.
Interim Financial Reporting	1-Required for publicly held companies	1-Not required but if presented 4 basic financial statements are required
Revenue Recognition of Construction Contracts	1-Percentage of completion and completed contract methods OK	1-Completed Contract Method is NEVER allowed. If certain criteria met, Percentage of completion method is used..   .
Pension		1-Use the projected unit credit method to calculate Present Value Defined Benefit Obligation 2- GAAP Accumulated benefit obligation= IFRS accrued benefit  obligation 3- Netting pension plan assets and liability is OK under some circumstances
Deferred Taxes	1-      Deferred taxes recognized full minus valuation allowances 2-      On B/S net current and Non-current deferred tax liability	1-Deferred taxes are recognized only to the extent it is probable they will be realized   2-All deferred taxes are NON-Current on statement of financial position, only net if they are due to same tax authority
Patent Defense	1-Successful defense; capitalize 2-Unsuccessful  defense; expense	Even successfully defended patent cost must be EXPENSED
Fixed Assets	1- There is no such a thing Revaluation of assets 2.   Unless assets are “held for sale”, written down because of impairment, it cannot be written back up 3.   NO Biological assets	1.   Revaluation of assets is permitted if elected but must be done an entire class of assets. Decrease is value reduce net income; increase in value increases accumulated OCI. 2.   Biological assets are a separate category .(Agricultural assets are living animals or plants) 3.   Reversal of impairment loss OK 4.   If the major components of an asset have significantly different patterns of economic benefits, they must be depreciated separately.