Anticipated areas of difference would be the financial statement presentation, recognition of accounting elements, measurement of accounting elements and disclosures and terminology (Wall Street Prep, n.d.). The financial statement presentation for the GAAP compliant version would need to present three periods, and the balance sheet would have to report assets in terms of decreasing liquidity. The statement of cash flows would disclose interest expense, interest income and dividend income . The IFRS version would not reflect quarterly reporting and may not have a Managements Discussion and Analysis section. It may also include earnings before interest, taxes, depreciation and amortization, which will likely present an altered view of the overall financial standing of the company.

The disclosure of Research and Development costs would not be expensed on the IFRS version. Contingent liabilities with a likelihood of less than fifty percent would still be disclosed, while those falling between 51 and 75 percent would not be disclosed. No deferred tax assets would be shown on the IFRS version. Investment property that draws rental income or that has appreciation value would be reported as Investment Property.

Inventory must be reported using a First-In, First-Out approach. Fixed assets would be reported based on their fair value and must be reported separately.

The Disclosures portion of the IFRS statement would use the term Provisions to describe Recognized Contingent Liabilities, probable to express a likelihood of greater than 50 percent instead of 75. Investments with significant influence would be referred to as Associates.

Agree or Disagree and Why?