![]() ![]() ![]() Although no concrete changes have been implemented by IASB or FASB, the result of both efforts may see convergence in some areas but will most likely result in even more differences between the two most commonly used accounting frameworks in the world.Īs a valuation advisory firm, Stout provides numerous impairment tests annually, including those under U.S. This is a similar project to what was undertaken by the Financial Accounting Standard’s Board (FASB) in the U.S. In 20, the International Accounting Standards Board (IASB) gathered and reviewed comments from market participants to a discussion paper that proposed certain changes to the impairment testing framework under IFRS. Furthermore, across the two frameworks, the recognition of impairment losses as well as the treatment of any subsequent recovery in the value of an asset may differ. Generally Accepted Accounting Principles (GAAP), on the other hand, applies a fair value framework to indefinite-lived intangible assets and a recoverability test for finite-lived assets. While the broader fair value standards and business combinations standards are largely aligned across the two reporting frameworks, significant divergence in impairment testing exists.Īt a broad level, IFRS applies a single framework across almost all non-financial assets whereby an asset should not be carried at more than what could be recovered through use (value in use ) or sale of the asset (fair value less costs of disposal ). companies have the option to list or register internationally / are owned by international conglomerates, it is important for companies and investors to understand the differences that exist to apply and interpret financial information. have either adopted or indicated that they intend to adopt International Financial Reporting Standards (IFRS). ![]() Most major capital markets outside of the U.S. ![]()
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