Part II of this video series is available to FinTree On-line Program Subscribers. To know more visit us at :
FinTree website link: [ Ссылка ]
FB Page link :[ Ссылка ]...
We love what we do, and we make awesome video lectures for CFA and FRM exams. Our Video Lectures are comprehensive, easy to understand and most importantly, fun to study with!
This Video lecture was recorded by our popular trainer for CFA, Mr. Utkarsh Jain, during one of his live CFA Level I Classes in Pune (India).
This Video Lecture series covers following key differences between US GAAP vs IFRS which can be tested on CFA Level I Exams.
1. Statement of Comprehensive Income
IFRS : Income Statement can be Combined with Other Comprehensive Income and presented a Single Statement of Comprehensive Income i.e. IS + OCI = CI OR IS and CI can be presented separately
US GAAP: Similar Presentation except that firms can choose to report Comprehensive Income in Statement of Shareholders Equity
2. Elements Related to Performance
IFRS : Income , Expenses
US GAAP : Revenues, Expenses, Gains, Losses, Comprehensive Income
3. Revenue Recognition Criteria for Sale of Goods
IFRS :
Risk and Reward is transferred
No control over the goods
Revenue reliably measured
Probable flow of economic benefits
Cost can be reliably measured
US GAAP :
Revenue is realized/ realizable
Earned
4. Long Term Contracts
IFRS : When outcome can’t be reliably measured-revenue is recognized to the extent of cost, cost are expenses when incurred, profit recognized on completion
US GAAP : When outcome can’t be reliably measured- Completed Contract Method, Revenue, expenses and profit is recognized when the contract is complete
5. Barter Transactions
IFRS : Revenue must be based on fair value of revenue from similar non barter transaction with non related parties
US GAAP : Revenue can be recognized at fair value only if firm has historically received cash payments for such goods/services
6. Extraordinary Items
IFRS : Does not allow extraordinary items to be reported separately
US GAAP : Unusual and Infrequent items- Reported separately in the income statement , net of tax, after income from continuing operations
7.Balance Sheet Presentation
IFRS : IFRS does not specify the order in which current or non current assets/ liability should be presented
Generally, Companies using IFRS order balance sheet information from least liquid to most liquid.
US GAAP : Generally, Companies using U.S. GAAP (e.g., Colgate) order items on the balance sheet from most liquid to least liquid
8. Cash Flow Statement Items- Non Financial Firm
IFRS :
Dividend Paid: CFO/CFF
Interest Paid: CFO/CFF
Dividend Received: CFO/CFI
Interest Received: CFO/CFI
Taxes Related to Operating activities: CFO
Taxes related to Financing Activities: CFF
Taxes Related to Investing activities: CFI
US GAAP :
Dividend Paid: CFF
Interest Paid: CFO
Dividend Received: CFO
Interest Received: CFO
Taxes Related to Operating activities: CFO
Taxes related to Financing Activities: CFO
Taxes Related to Investing activities: CFO
9.Cash Flow Statement Presentation
US GAAP:
If direct method is used, Firm must add a disclosure of indirect method
Most companies use indirect method
IFRS: No such disclosure required
10. Inventory Valuation Methods
IFRS:
Specific Identification
Weighted Average
FIFO
US GAAP:
Specific Identification
Weighted Average
FIFO
LIFO
11. Inventory Write Downs
Explained through a Flow Chart.
12. Capitalized Interest
IFRS: Income earned by temporary investing borrowed funds reduces the interest that is eligible for capitalization
US GAAP: No such reduction
13. Research and Development cost
IFRS : Research cost - Expensed
Development Cost - Capitalized
US GAAP : Research Cost- Expensed
Development Cost – Expensed
(* Software Development Cost )
14.Software Development Cost
Explained through a Flow Chart.
15. Component Depreciation
IFRS : IFRS Requires firms to depreciate component of Assets separately
Requiring useful life estimates for each component
US GAAP: Component Depreciation is allowed, but seldom used.
16. Cost vs. Revaluation Model
IFRS :
Firms can either use Cost or Revaluation Model
However, same model should be asset for entire asset class
Revaluation model is rarely used in practice
US GAAP : Assets are reported at Cost (–) Accumulated Depreciation
17.Impairment of PPE
Explained through a Flow Chart/
18. Investment PPE
IFRS :
Property owned for the purpose of collecting rental income or capital appreciation is classified as Investment PPE.
Gives a choice of Cost or Fair Value for Investment PPE
Use same valuation model for all PPE
19. Long Term Bond Liability- Calculation
20. Bond Issuance Cost
21. Deferred Tax Assets/ Deferred Tax Liabilities
22. Classification of Lease- Books of Lessee
23. Classification of Lease- Books of Lessor
24. Component of Pension Expense
#GAAP #IFRS #FinTree
CFA Level I - US GAAP vs IFRS - Part I (of 2)
Теги
CFA Level Level 1FinTreeCFA training in PuneCFA classes in PuneCFA training in IndiaCFA level I videoCFA Video TutorialFinTree IndiaChartered Financial Analyst (Profession)International Financial Reporting StandardsGenerally Accepted Accounting PrinciplesCFA classes in MumbaiCFA coaching in HyderabadCFA coaching in DelhiCFA coaching in BangloreThe DifferenceBest Differences!ConceptsPART I
