discounting of deferred taxes.
RAP: In RAP, accounting for income taxes is governed by
PBU 18/02 Accounting for Profits Tax Settlements of Organizations
that significantly differs from the corresponding IFRS and
US GAAP standards.
subsidiaries or joint
(often referred to
as outside basis
Recognition not required for investment
in a foreign subsidiary or corporate JV
that is essentially permanent in duration,
unless it becomes apparent that
deferred tax asset or
Enacted tax rates must be used. Enacted or "substantively enacted"
tax rates as of the balance sheet date
must be used.
Enacted and effective as at the reporting
date tax rates must be used.
acquisition method (fair value) if there
is substance to the transaction (policy
Other differences may arise due to different accounting requirements of other
existing US GAAP and IFRS literature (e.g., identifying
the acquirer, defi
No specific guidance; tax assets/
liabilities should be measured in the
amount expected to be paid.
Does not include an exemption like
that under IFRS for non-recognition of
deferred tax effects for certain assets o
inputs (i.e., Level 3 measurements).
Day one gains and losses on financial
instruments are recognized only
when their fair value is evidenced by
a quoted price in an active market for
an identical asset or liability (i.e., a
level 1 or level 2 input) or b
equity instrument until such near-term
recovery; otherwise an impairment
loss must be recognized in the income
Impairment of an AFS equity
instrument is recognized in the
statement of comprehensive income
when there is objective evidence that
focuses on the exit plan as a whole,
rather than individual cost components
of the plan.
Restructuring costs in RAP are within
the scope of the requirements of
PBU 8/2010 Provisions, Contingent
Liabilities and Contingent Assets
which prescribes the condit
allowed, but not obliged, to follow
IFRS for impairment rules.
The amount by which the carrying amount
of goodwill exceeds the implied fair value of
the goodwill within its reporting unit.
Impairment loss on the CGU (
of items being measured, such as
warranty costs, the best estimate is
the typically expected value, although
the mid-point in the range may also be
used when any point in a continuum is
as likely as another. The best estimate
for a single obligation may b
a fair value option.
RAP: RAP requires financial instruments to be classified into
specific categories to determine the measurement of those
instruments and clarify when the financial instruments should be
recognized or derecognized in financial statement
control, potential voting rights) would continue to exist. The FASB
technical plan calls for a final Accounting Standards Update to be
issued by the end of 2014.
In December 2012, the IASB issued proposed amendments
to IFRS 10 and IAS 28. Among other thin
No further convergence is planned at this time.
No significant development activities are planned in this area for
the near term.
26 | IFRS, US GAAP and RAP. Comparison and basics
The overall accounting for leases
Tax basis is generally the amount
deductible or taxable for tax purposes.
The manner in which management
intends to settle or recover the
carrying amount affects the
determination of tax basis.
Tax basis is not defined in RAP where the
construction or production of a qualifying asset. Qualifying assets
are generally defined similarly under both accounting models.
However, there are differences between US GAAP and IFRS in the
measurement of eligible borrowing costs for capitalization.
of money and the risks specific to the
In general, similar to IFRS.
provisions range of
Most likely outcome within range
should be accrued. When no one
outcome is more likely than the others,
the minimum amount
and leaseback when
the leaseback is an
If the seller does not relinquish more
than a minor part of the use of the
asset, gain or loss is generally deferred
and amortized over the lease term.
If the seller relinquishes more than a
Changes in Foreign Exchange Rates, are similar in their approach
to foreign currency translation. Although the criteria to determine
an entitys functional currency are different under US GAAP and
IFRS, both ASC 830 and IAS 21 generally result in the same
over its remaining life.
The impairment loss of an HTM
instrument is measured as the
difference between the carrying
amount of the instrument and the
present value of estimated future cash
flows discounted at the instruments
original effective interest ra
incurred, capitalize costs and amortize
through the date of the next overhaul, or
follow the IFRS approach.
Costs that represent a replacement
of a previously identified component
of an asset are capitalized if future
economic benefits are probable and
exposure draft on lease accounting that would create a common
standard for lease accounting and require lessees to recognize the
assets and liabilities arising under most lease contracts on their
The draft of a new PBU Acc
RAP: There is no corresponding accounting guidance for the
assessment of impairment indicators with regard to long-lived
assets. However, accounting for impairment is mentioned in PBU
14/2007 Accounting for Intangible Assets and PBU 24/2011
impairment loss calculation be
performed if impairment indicators
PBU 24/2011 Accounting for
Exploration of Natural Recourses,
requires that impairment loss
calculation be performed if
impairment indicators exist.
There is no corresponding accounti
criteria (ASC 840) or indicators (IAS 17) to determine whether a
lease is capital or operating. The criteria or indicators of a capital
lease are similar in that both standards include the transfer of
ownership to the lessee at the end of the lease term a
consolidated the financial statements of
all the entities below it.
The method of consolidation is not
specified and, as a result, either the
"direct" or the "step-by-step" method
of consolidation is used. Under the
"direct" method, each entity within
Joint ventures are generally defined as
entities whose operations and activities
are jointly controlled by their investors
(e.g., equity investors, certain parties
with decision-making rights through a
Joint control is defined as existing when
and not apply the equity method.
Jointly controlled entities are accounted
for at cost as investments in accordance
with PBU 19/02 Accounting for Financial
Investments. Furthermore, PBU 20/03
Information Concerning Participation in
Joint Activities addres
Provisions may be discounted only when
the amount of the liability and the timing
of the payments are fixed or reliably
determinable, or when the obligation
is a fair value obligation (e.g., an asset
retirement obligation under
16 | IFRS, US GAAP and RAP. Comparison and basics
US GAAP IFRS RAP
Development costs Development costs are expensed as
incurred unless addressed by guidance in
another ASC Topic. Development costs
related to computer software devel
statements and disclosed in the notes to them.
Consolidated financial statements prepared in accordance with
the Federal Law On Consolidated Financial Statements No. 208-FZ
should also be presented in Russian rubles.
Foreign currency matters
IFRS, US GAAP