Instructions: Restate Broadwell's consolidated financial statements from the given IFRS to U.S. GAAP and show the debit credit entries in Broadwell worksheet using IFRS to US GAAP worksheet below

Broadwell Restatement worksheet (in millions)
	IFRS	Reconciling Debt	Adjustments Credit	US GAAP
Consolidated Statement of Operations
Net revenues	9,842
Capitalized cost and changes in inventories	277
Total	10,119
Goods and services purchased	1,666
Personnel expenses	2,584
Other operating expenses	2,090
Depreciation and amortization	1,739
Restructuring charges	1,726
Total operating expenses	9,805
Operating income	314
Interest expense	-428
Financial income	25
Income (loss) before income taxes and equity in net loss of affiliated companies	-89
Income tax expense	1
Income (loss) before equity in net loss of affiliated companies	-90
Equity in net loss of affiliated companies	-325
Net income (loss)	-415
Consolidated Retained Earnings Statement
Retained earnings, 1/1	-151
Net loss	-415
Profit distribution declared	-1,282
Conversion of loan payable to equity	3,200
Retained earnings, 12/31	1,352
Consolidated Balance Sheet Asset
Current assets
Cash and cash equivalents	256
Securities available for sale	51
Trade accounts receivable	2,052
Inventories	169
Other current assets	34
Total current assets	2,562
Non-current assets
Property, plant and equipment	11,453
Investments	1,238
Other non-current assets	220
Total non-current assets	12,911
Total assets	15,473
Liabilities and shareholders equity
Current liabilities
Short-term debt	1,178
Trade accounts payable	889
Accrued pension cost	789
Other current liabilities	2,213
Total current liabilities	5,069
Long-term liabilities
Long-term debt	6,200
Finance lease obligation	439
Accrued pension cost.	1,488
Accrued liabilities	709
Other long-term liabilities	338
Total long-term liabilities	9,174
Total liabilities	14,243
Shareholders equity
Retained earnings	1,352
Unrealized market value adjustment
on securities available for sale	39
Cumulative translation adjustment	-161
Total shareholders equity	1,230
Total liabilities and shareholders equity	15,473

Adjustment notes: IFRS to US GAAP adjustments; current year ending Dec 31	(in millions)
Net income (loss) according to IFRS U.S. GAAP adjustments	-415
a) Capitalization of interest cost	8
b) Restructuring charges	205
c) Depreciation expense	-5
d) Capitalization of software	182
e) Restructuring charges by affiliates	50
Net income according to U.S. GAAP	25
Reconciliation of shareholders equity from IFRS to U.S. GAAP
Shareholders equity according to IFRS	1,230
U.S. GAAP adjustments
a) Capitalization of interest cost	54
b) Restructuring charges	205
c) Depreciation expense	-5
d) Capitalization of software	475
e) Restructuring charges by affiliates	50
Shareholders equity according to U.S. GAAP	2,009

1: Broadwell expenses all interest costs as incurred. U.S. GAAP requires interest costs incurred during the construction of property, plant and equipment to be capitalized. Under U.S. GAAP Broadwell would have capitalized 13 million and amortized 5 million for the current year.

2: During the current year, Broadwell recognized under IFRS restructuring charges totaling 1,726 million. The following schedule illustrates adjustments necessary to reconcile these charges to amounts determined under U.S. GAAP

Restructuring charges in accordance with IFRS:
Personnel restructuring charges (affects other long-term liabilities)	1,326
Write-down of long-lived assets	316
Miscellaneous restructuring charges	84
Total in accordance with IFRS	1,726
Adjustments to restructuring charges to accord with U.S. GAAP	-205
Restructuring charges in accordance with U.S. GAAP	1,521

3: Due to the difference in carrying value of long-lived assets after write-downs described in (2), there is a difference in the amount of depreciation expense taken under IFRS and U.S. GAAP. An adjustment is made for the current year to record an additional 5 million of depreciation under U.S. GAAP.

4: Broadwell has expensed software costs as incurred. For U.S. GAAP purposes external consultant costs incurred in the development of software for internal use have been capitalized. These costs are being amortized over a three year period. The capitalization of software costs accords with common practice in the U.S. telecommunications industry. Broadwell has capitalized, as disclosed in the reconciliation of net income (loss) and shareholders equity to U.S. GAAP, 220 million and amortized 37 million in the previous year and capitalized 370 million and amortized 188 million in the current year.

5: During the current year, Broadwells share of personnel and other restructuring charges recorded by affiliates amounted to 50 million. These restructuring charges do not meet all the recognition criteria contained in EITF 94-3 and therefore cannot be expensed in the current year, under U.S. GAAP.During the current year, Broadwells share of personnel and other restructuring charges recorded by affiliates amounted to 50 million. These restructuring charges do not meet all the recognition criteria contained in EITF 94-3 and therefore cannot be expensed in the current year, under U.S. GAAP.