Gross Trade A ccounting, Cross Country Production Sharing and Global Value-Chain
Ccounting for Long
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ccounting for Long-Lived Assets (Intangible Assets) IFRS versus GAAP Listed below are some of the major differences in accounting for long-lived intangible assets between International Financial Reporting Standards (IFRS) and U.S. GAAP. This material is excerpted fromWiley IFRS 2010: Interpretation and Application of International Financial Reporting Standards . U.S. GAAP Long-Lived Assets (Intangible) IFRS Long-Lived Assets (Intangible) Internally generated goodwill not recognized (although, implicitly, indirectly given recognition in limited circumstance of replacement for impaired acquired goodwill) Internally generated goodwill not recognized Research and development expenditures all expensed as incurred, included in operating cash flows Research costs expensed as incurred, but development costs capitalized and amortized, portion capitalized in period is included in investing cash flows Measurement of impairment done with reference to fair value (often operationalized as discounted cash flows) Measurement of impairment done with reference to higher of value in use or fair value less costs to sell Estimated residual often defined by present value of expected disposal proceeds Estimated residual value defined by current net selling price assuming asset is age, condition as of expected end of useful life Measurement of goodwill impairment uses special method, requires first comparing fair value of cash generating unit to book value including goodwill, then comparing implied goodwill to carrying value; measured at level of business segment or one level below that Measurement of goodwill impairment similar to other long lived assets, requires only single-step computation; measured at lowest level goodwill can be assigned (cash generating unit) Impairment testing at segment or lower level, except that indefinite life intangibles are tested separately from business unit Impairments tested at cash generating unit level No reversals of impairments once recognized for intangible assets Impairments of intangible, once recognized, can be reversed, under defined conditions, except for goodwill
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Transcript of Ccounting for Long
8/3/2019 Ccounting for Long
http://slidepdf.com/reader/full/ccounting-for-long 1/2
ccounting for Long-Lived Assets (Intangible Assets)IFRS versus GAAP
Listed below are some of the major differences in accounting for long-lived intangible assetsbetween International Financial Reporting Standards (IFRS) and U.S. GAAP. This material is
excerpted fromWiley IFRS 2010: Interpretation and Application of International Financial Reporting Standards .
U.S. GAAP Long-Lived Assets (Intangible) IFRS Long-Lived Assets (Intangible)
Internally generated goodwill not recognized(although, implicitly, indirectly given recognition inlimited circumstance of replacement for impairedacquired goodwill)
Internally generated goodwill not recognized
Research and development expenditures all
expensed as incurred, included in operating cashflows
Research costs expensed as incurred, but
development costs capitalized and amortized,portion capitalized in period is included in investingcash flows
Measurement of impairment done with reference tofair value (often operationalized as discountedcash flows)
Measurement of impairment done with reference tohigher of value in use or fair value less costs to sell
Estimated residual often defined by present valueof expected disposal proceeds
Estimated residual value defined by current netselling price assuming asset is age, condition as of
expected end of useful life
Measurement of goodwill impairment uses specialmethod, requires first comparing fair value of cashgenerating unit to book value including goodwill,then comparing implied goodwill to carrying value;measured at level of business segment or onelevel below that
Measurement of goodwill impairment similar toother long lived assets, requires only single-stepcomputation; measured at lowest level goodwillcan be assigned (cash generating unit)
Impairment testing at segment or lower level,
except that indefinite life intangibles are testedseparately from business unit
Impairments tested at cash generating unit level
No reversals of impairments once recognized forintangible assets
Impairments of intangible, once recognized, can bereversed, under defined conditions, except forgoodwill
8/3/2019 Ccounting for Long
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Revaluations never permitted (only amortized costis permitted)
Revaluation of intangibles permitted under limitedcircumstances
Decommissioning (asset retirement) obligations
not recomputed after initial computation, generally
Decommissioning (asset retirement) obligations
recomputed at current risk-adjusted rate each dateof the statement of financial position
Contact IFRS international accounting expert Dr. Barry Epstein, CPA for more information.Learn more about Dr. Epstein at www.ifrsaccountant.com. He can be reachedat mailto:[email protected] or
