This podcast will give you an overview of the similarities and differences between some of the newer US GAAP and IFRS accounting standards. While there are a number of similarities and differences between the two frameworks, this episode will focus on the three major accounting areas where the FASB and the IASB have issued new guidance in the last few years -- leases, financial instruments and revenue recognition.
This podcast provides an overview of the similarities and differences between some of the newer US GAAP and IFRS accounting standards the FASB and the IASB issued in the last few years -- leases, financial instruments and revenue recognition.
The FASB and IASB both issued their new leasing standards in the first quarter of 2016. While there are many similarities between the two standards, there are some differences in effective dates for private companies, scope exceptions, lessee accounting (classification models, income statement presentation, etc.) and lessor accounting (balance sheet and income statement presentation). There are also differences in practical expedients available as companies transition to the new standards.
The FASB and the IASB have taken slightly different approaches for accounting for financial instruments. The IASB issued IFRS 9 - a single new accounting standard on financial instruments in July 2014, covering classification and measurement, impairment, and derivatives and hedging. The FASB, on the other hand, has issued several separate accounting standards related to financial instruments over the last couple of years. It issued guidance related to recognition and measurement in January 2016. Later that year, the FASB issued new impairment guidance. New derivatives and hedging guidance was issued in August 2017. Given the different approaches, there are differences in effective dates between the two frameworks. There are also differences in classification and measurement and impairment models. Finally, while both IFRS and US GAAP hedging standards permit more hedging strategies to qualify for hedge accounting, the frameworks still retain complex - and often different - requirements for hedge accounting.
The FASB and IASB issued their new revenue recognition standards, Revenue from Contracts with Customers, in May 2014, as a result of a joint project to develop a single principle-based model. While the guidance is mostly converged, there are some differences in effective dates for private companies and amendments issued to the guidance subsequent to initial issuance of the standard.
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