1. Choose a foreign registrant listed on a U.S. stock exchange that files its financial statements in IFRS and an industry competitor in the US that uses GAAP. 2. Save a copy of form 20-F or foreign company annual report prepared using IFRS as issued by the IASB. Also, obtain the 10-K for an industry competitor in the US using GAAP. 3. Find three major differences on the Income Statement between the competitor firms using IFRS and GAAP. Example: Presentation differences: Income Statement expenses listed by nature for Company X and function for Company Y. 4. Describe at least two differences in disclosure provided in the footnotes of the competitors under IFRS and US GAAP. Example: The Property, Plant and Equipment footnote is much more detailed for Company X in IFRS than for Company Yusing US GAAP. For each PP&E component, it reconciles the differences beginning and ending net book values including additions, disposals, currency translation effects, depreciation and impairments. Company Y lists the PP&E components only. 5. Compare the company's profitability under IFRS and U.S. GAAP for at least two years. At minimum, calculate a measure of return on equity under each (Net Income/Shareholders' Equity). Explain whether you think the difference in profitability between the two firms is driven primarily by economic or accounting differences? Example: Return on Equity for Company X is affected by revaluation of PP&E. Revaluations decreases the numerator (excess depreciation) and increases the denominator. Profitability difference is economic. Company Y's customer loyalty and distinct products distinguished it from Company X. 1. Choose a foreign registrant listed on a U.S. stock exchange that files its financial statements in IFRS and an industry competitor in the US that uses GAAP. 2. Save a copy of form 20-F or foreign company annual report prepared using IFRS as issued by the IASB. Also, obtain the 10-K for an industry competitor in the US using GAAP. 3. Find three major differences on the Income Statement between the competitor firms using IFRS and GAAP. Example: Presentation differences: Income Statement expenses listed by nature for Company X and function for Company Y. 4. Describe at least two differences in disclosure provided in the footnotes of the competitors under IFRS and US GAAP. Example: The Property, Plant and Equipment footnote is much more detailed for Company X in IFRS than for Company Yusing US GAAP. For each PP&E component, it reconciles the differences beginning and ending net book values including additions, disposals, currency translation effects, depreciation and impairments. Company Y lists the PP&E components only. 5. Compare the company's profitability under IFRS and U.S. GAAP for at least two years. At minimum, calculate a measure of return on equity under each (Net Income/Shareholders' Equity). Explain whether you think the difference in profitability between the two firms is driven primarily by economic or accounting differences? Example: Return on Equity for Company X is affected by revaluation of PP&E. Revaluations decreases the numerator (excess depreciation) and increases the denominator. Profitability difference is economic. Company Y's customer loyalty and distinct products distinguished it from Company X
