Select the company ( Walmart, Target, Kroger, Sears or Amazon) that you will use
ID: 2584930 • Letter: S
Question
Select the company ( Walmart, Target, Kroger, Sears or Amazon) that you will use to build your portfolio
Explain the steps that would be needed for your selected portfolio company to transition from GAAP to IFRS. For example, what would this transition entail? What would your chosen company need to do?
Explain how a financial statement would differ under IFRS as opposed to GAAP.
i. How is a financial statement under IFRS different from GAAP? How is it the same?
ii. What would the statements for your chosen company look like?
Support your argument with at least three peer-reviewed sources cited in APA format.
Explanation / Answer
The Company I would be choose to build my portfolio is Amazon.
GAAP is considered “rules based” while IFRS is considered “principles based”. To transitionfrom GAAP to IFRS the IFRS 1, First-Time Adoption of International Financial ReportingStandards, was created. This gives companies steps to take when transitioning from GAAP. Sincethere are many things that have be done differently than under GAAP, it is important that thesteps are followed properly.
IRFS 1 is kept up to date with what is needed for companiesadopting this for the first time.To start the transition, the finance and operations department will have to look at howinformation is maintained and gathered as well as look at contracts that are used.
IFRS studies that define accounting distance as the difference between the investee’s home country GAAP and IFRS, we define accounting distance as the difference between the accounting standards used in the investors’ and investee’s home countries. The pairwise measure allows us to decompose the changes in AD into two components: (i) changes arising from an investees’ IFRS adoption and (ii) changes arising from IFRS adoption in the investor’s country.
Explain how a financial statement would differ under IFRS as opposed to GAAP.
i. How is a financial statement under IFRS different from GAAP? How is it the same?
- Accounting Principle ,'Going Concern' is followed under GAAP and not Under IFRS.
- Unlike IFRS, there is no exemptions, other than for investment companies, from preparing consolidated finanacial statement if entity has one or more subsidies.
- Cash &Cash equivalents are recorded under investment under both IFRS & GAAP but Bank Overdraft is consider as a financing actvity under GAAP and not under IFRS.
- Like, IFRS, the fair value measurement codification topic applies to the most fair value measurement and disclosures that are required or permitted by other codification topics / subtopics. However, the scope of exemptions differ in some respect from IFRS because differences from IFRS in the undelying codification topics / Subtopics with which the fair value measurement codification topic interacts.
- Like IFRS, subsideries are generally consolidated , as an exception investment entities are generally account for investments in subsidaries at fair value. However, unlike IFRS, there are additional exceptions for certain other specailised industries.
- Like IFRS, business combinations are accounted for under the acquisition method, with limited exceptions.
Like IFRS, a 'business combination' is a transaction or other event in which acquirer obtains control of one or more business. However, the US GAAP guidance on control differs from IFRS.
- Like IFRS,an entity measures its assets, liabilities , income and expenses in its functional currency, which is the currency of the primary economic environment in which it operates. However, indicator used to determine the functional currency differe insome respect of IFRS.
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