Chapter 4 - IFRS - Financial statements Executive summary...

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Financial statements
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Financial statements Page 2 Executive summary In both frameworks, the components of a complete set of financial statements are the same except that IFRS (and the SEC) requires the statement of changes in equity while US GAAP permits it. In both frameworks, the financial statement presentation is very similar. Differences between the two tend to arise in the level of specific guidance. Significant differences are as follows: Income statement: IFRS includes a minimum list of items to be presented unlike US GAAP. However, SEC regulations have more detailed requirements than IFRS. IFRS prohibits extraordinary items unlike US GAAP. IFRS does not define certain key income statement measures. While US GAAP does not define all these measures either, SEC regulations provide requirements and limitations on the ability of public companies to disclose non-GAAP measures.
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Financial statements Page 3 Executive summary Financial statement presentation differences (continued): Statement of comprehensive income: IFRS permits comprehensive income to be presented in one statement of comprehensive income or in two statements comprising a separate income statement and a statement of comprehensive income similar to US GAAP. Statement of changes in equity: IFRS does not permit the components of comprehensive income to be presented in the statement of changes in equity in lieu of the statement of comprehensive income as permitted by US GAAP. Notes to the financial statements: Using IFRS, most companies will experience additional financial disclosure requirements compared to US GAAP.
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Financial statements Page 4 Primary pronouncements Income statement US GAAP ARB No. 43 – Restatement and Revision of Accounting Research Bulletins (Chapter 2 -Form of Statements ) APB No. 30 – Reporting the Results of Operations SFAS No. 128 – Earnings per Share SFAS No. 130 – Reporting Comprehensive Income SFAS No. 154 – Accounting Changes and Error Corrections IFRS IAS 1 – Presentation of Financial Statements IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors IAS 18 – Revenue IAS 33 – Earnings per Share IFRS 5 – Non-Current Assets Held for Sale and Discontinued Operations
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