Question

ON BOEING AND  China Eastern Airlines

Describe at least two differences in disclosure provided in the footnotes of the competitors under IFRS and US GAAP. Example:

The Property, Plant and Equipment footnote is much more detailed for Company X in IFRS than for Company Y using US GAAP. For each PP&E component, it reconciles the differences beginning and ending net book values including additions, disposals, currency translation effects, depreciation and impairments. Company Y lists the PP&E components only.

For one of the major accounting differences, do further research into the applicable standards for IFRS and for U.S. GAAP. Quote portions from each standard and then explain the standards in your own words. Where are the U.S. GAAP and IFRS standards specifically similar and different? Example:

Earnings per Share:   Under IFRS, Company X calculates dilutive potential common shares independently for each interim period presented (discrete method). Under US GAAP, Company Y computes dilutive potential common shares on a year-to-date weighted average for each interim period presented (integral method).

Answer 1

part 1: Difference in foot notes

a)Deferred Taxes: Under IFRS , DEFERRED TAXES are classified as Non-current on the balance sheet . The FOOTNOTES then contains information describing temporary differences between amounts that can be recovered within one year from balance sheet date and those requiring longer than one year

Under US GAAP guidlines allow taxes to be listed both as current and non-current and do not have this footnote requirement

b) Adjustments to Assets & Liabilities- Requirement of IFRS Dictate that managements expectations for Future adjustments to assets and liabilities on balance sheet date should be fully disclosed n details in notes.In Addition,disclosure of accounting policies that influence these adjustments/expectations should be included in footnotes.

GAAP rules only require asummary of accounting policies

part2: One Major difference

INVENTORY VALUATION & INVENTORY REVERSAL

IFRS	GAAP
under IFRS , LIFO IS NOT Allowed as it says that LIFO does not reflect accurate flow of Inventory in most cases and thus results in reporting of usually of low levels of Income	Under GAAP a company is allowed to use to LIFO (Last in first out) method for inventory estimates
Inventory reversal:Under IFRS , The Amount of write down can be reversed	Inventory reversal:GAAP Specifies that if the market value of the asset increases , the amount of write-down cannot be reversed In other words, GAAP is overly-cautious of inventory reversal and does not reflect any positive changes in market place