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Unformatted text preview: Kaboom! EUs implementation of IFRS was done poorly because of rushed implementation job and poor quality standards from the start Numerous drawbacks surrounding IFRS and problems encountered by EU & Australia IFRS in its infancy and decades behind the rules currently used in US & Canada AcSB was severely underfunded and under pressure to please auditors of Canada o Chose to adopt IFRS instead of US GAAP because of it being principle-based but US GAAP also principles o argued that fewer rules were better because rules had not prevented accounting blow-ups in US o did not consult parliament about switching to foreign standards and giving control of our standards to a foreign body Benefits for AcSB/Auditors: Windfall of fees and revenue LIES: o Worldwide comparability; that cannot be achieved due to: Different currencies, interest rates, tax regimes, legal frameworks, ethical standards, auditing enforcements, regulator ideologies Excessive management leeway that is inherent in the new rules o Under IFRS, make accounting assumptions within broad acceptable ranges that may directly impact their bonuses US adopt IFRS by 2016; SEC has been criticized for its financial deregulation initiatives + IFRS o No word heard about it afterwards Fair Value accounting has been modified in the EU in response to Financial crisis Letting multi-million corporations test the waters on this IFRS policy that is decades behind the CDN FYI: Accounting Standards Part 1: IFRS for publicly accountable enterprises other than pension plans Part 2: new set of accounting standards developed by AcSB for private enterprises (either adopt Part 1or2) Part 3: Non-For-Profit Organizations Part 4: pension plans (will be required to apply the standards in Part IV rather than IAS 26) Part 5: Pre-changeover accounting standards until enterprises have adopted one of the other parts Non-Controlling Interests o Most acquired assets /liabilities assumed to be measured at fair value o Any interest in the acquire owned prior to obtaining control will be remeasured in FV at Acquisition date Eliminating step acquisitions o Bargain purchase will result in recognition of a gain. o Acquisition costs must be expensed o Non-controlling Interests will be recognized as a separate component of shareholders equity o Net income is calculated without deduction for non-controlling interest o Net income is allocated between controlling and non-controlling interests Comprehensive Revaluation of Assets & Liabilities o Push-down accounting is used following acquisition of an enterprise A&L are measured at the values used in purchase transaction o Future income tax asset that arose prior to the date of a comprehensive revaluation and that was not recognized in comprehensive revaluation is subsequently recognized o Amendments apply prospectively to comprehensive revaluations of assets and liabilities Financial Instruments o Enhanced Disclosure requirements include:...
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- Spring '11