Subsequent_events_slides

Subsequent_events_slides - Subsequent events Typical...

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Subsequent events
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Subsequent events Page 2 Typical coverage of US GAAP Subsequent events period Type I subsequent events (events that arise prior to the balance sheet date) Type II subsequent events (events that arise after the balance sheet date)
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Subsequent events Page 3 Executive summary The accounting for subsequent events under IFRS and US GAAP is largely similar. Under IFRS, the subsequent event period runs through the authorization date of the financial statements. Under US GAAP, the subsequent event period for SEC filers runs through the date that the financial statements are issued, and for non-SEC filers, it runs through the date the financial statements are available to be issued.
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Subsequent events Page 4 Primary pronouncements US GAAP ASC 855, Subsequent Events (as amended by ASU No. 2010-09, Subsequent Events ) IFRS IAS 10, Events After the Reporting Period
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Subsequent events Page 5 Progress on convergence No further convergence is planned at this time.
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Subsequent events Page 6 Subsequent events period The subsequent events period begins immediately following the balance sheet date. Similar IFRS US GAAP
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Subsequent events Page 7 Subsequent events period Date through which subsequent events are evaluated IFRS Subsequent events are evaluated through the date that the financial statements are “authorized for issue.” The authorization date is prior to the filing date. Depending on an entity’s corporate governance structure and statutory requirements, authorization may come from management or a board of directors. Requires disclosure of the date the financial statements were authorized for issuance. US GAAP Subsequent events are evaluated through the date that the financial statements are issued (for SEC filers) or are available to be issued (in the case of non-SEC filers). For SEC filers, the issuance date is also the date that the financial statements are filed with the SEC. SEC filers are not required to disclose the date the financial statements were issued, however, such disclosure is required for a non-public company.
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Subsequent events Page 8 Example 1 The Hilo Company (Hilo), a public company in the United States, is considering adopting IFRS in 2010 or 2011. The Board met on February 20, 2010, and voted to accept the final financial statements and authorized management to file the financial statements with the SEC on February 28, 2010. Date through which subsequent events are evaluated example Under IFRS, would Hilo record the subsequent event described above similarly to US GAAP? On February 23, 2010, a decision was reached in a lengthy lawsuit against Hilo, whereby the amount of the judgment against Hilo exceeded the recorded accrued liability by $5.0 million. Because the conditions on which the judgment was rendered existed at December 31, 2009, Hilo decided that this was a Type I subsequent
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This note was uploaded on 09/30/2010 for the course ACCT 3311 taught by Professor Gregsommers during the Spring '10 term at Southern Methodist.

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Subsequent_events_slides - Subsequent events Typical...

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