Chapter 9 IFRS

Chapter 9 IFRS - o If revaluation is used, it must be...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
IFRS KEY POINTS (Chapter 9) Similarities Between IFRS and GAAP: Definition for plant assets is essentially the same Both follow the cost principle when accounting for plant assets Interest costs incurred during construction are capitalized Same depreciation methods (straight-line, accelerated, and units-of-activity) Only take into account the current period and prior period when it comes to changes in depreciation Accounting for disposals Definition of intangible assets Costs associated with R&D are segregated into two components o Costs in the research phase are always expensed Differences Between IFRS and GAAP IFRS requires component deprecation specifies that any significant parts of a depreciable asset that have different estimated useful lives should be separately depreciated o Allowed under GAAP but seldom used IFRS uses the term residual value instead of salvage value IFRS allows companies to revalue plant assets to fair value at the reporting date
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: o If revaluation is used, it must be applied to all assets in a class of assets o Assets that are experiencing rapid price changes must be revalued on an annual basis, otherwise less frequent revaluation is acceptable o First record depreciation after one year o Then record the adjusting plan assets to fair value For IFRS n R&D, costs in development are capitalized as Development Costs once technological feasibility is achieved IFRS permits revaluation of intangible assets and GAAP prohibits revaluation of intangible assets IFRS requires an impairment tests at each reporting date for plant assets and intangibles and records an impairment if the assets carrying amount exceeds its recoverable amount Under GAAP, impairment loss is measured as the excess of the carrying amount of the assets fair value IFRS allows reversal of impairment losses when there has been a change in economic conditions, and GAAP does not...
View Full Document

This note was uploaded on 02/02/2012 for the course ACCT 100 taught by Professor Punke during the Fall '08 term at Wisconsin.

Ask a homework question - tutors are online