Question

research and analyze two accounting disclosures that the FASB and the IASB have yet to reconcile.Your solution to reconciling these differences should be your own, drawing on your accounting knowledge and your understanding

Answer 1

The single and most notable difference between GAAP and IFRS is that GAAP is based on rules while IFRS is based on principles. This difference can attribute to a major potential in different interpretations of similar transactions. This can cause a major and extensive disclosure in financial statements.

Disclosure under Segment Reporting

The requirements for segment reporting under both ASC 280, Segment Reporting, and IFRS 8, Operating Segments,

Under IFRS 8,If segment liabilities are regularly reported to the CODM, then segment liabilities are a required disclosure.Unkile IFRS, US GAAP, ASC 280 Entities are not required to disclose segment liabilities even if reported to the CODM.

Solution to Reconcile this:- As per my understanding, IFRS 8 is more Logical to me.Reason being CODM normally reviews those segment assets and Liabilities which are material to the business.So, stakeholder should also have idea about the segment in which Chief Operating Decison maker of entity is interested.

Disclosure on related Parties.

Under US GAAP,ASC 850, Related Party Disclosures requires disclosure of all material related party transactions, other than compensation arrangements, expense allowances and other similar items in the ordinary course of business.However, under IFRS, IASIAS 24, Related Party Disclosures provides a partial exemption from the disclosure requirements for transactions between government-related entities as well as with the government itself

Solution to Reconcile this- In the given case US GAAP ,ASC 850 seems logical and transparent to me.Accounting should be same for all the entities.Otherwise stakeholde's wouldn't get the true and fair view of financial statment.Therefore, logically IFRS should withdraw this exemption but Regional accounting bodies won't let this happen,