The United States requires financial statements to be prepared under GAAP but mo

Question

The United States requires financial statements to be prepared under GAAP but most every other country utilizes the international Financial Reporting Standards (IFRS). For many years the United States has been working toward converging GAAP rules with IFRS so that companies could have one set of rules that would apply to every county when issuing their financial statements. There are still some major differences between GAAP and IFRS. Intangible assets is one of the differences, provide an explanation of the difference in detail including what financial statements would be affected and how it would affect financial statements if we were to change our rule to match IFRS. Citations please.

Explanation / Answer

There are few differences in intangible assets accounting in US GAAP and IFRS and Revaluation of the intangible assets is the most critical one.

Both standards require goodwill and intangible assets with indefinite lives to be reviewed at least annually for impairment and more frequently if impairment indicators are present. Under USGAAP the amount by which the carrying value of the asset exceeds its fair value where as in IFRS the amount by which the carrying value of the asset exceeds its recoverable amount.

Further more the reversal is not allowed in USGAAP but allowed in IFRS if certain conditions are met.

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.