International Financial Reporting Standards - Will the Transition from GAAP to IFRS Affect Your U.S.-based Company?

Major accounting changes are coming to the U.S. as generally accepted accounting principles (GAAP) and international financial reporting standards (IFRS) converge in the next several years.  And the impact should concern more than just accountants. A change of this magnitude will impact analysis models, accounting software, and training.  Companies of all sizes, but especially publicly-held companies who will see the changes first, need to understand that using a different accounting method can create different financial results and, potentially, increased tax liabilities.

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About Frank Hamelly

Frank Hamelly, Sr. Dynamics Consultant with I.B.I.S., Inc., in Charlotte, NC,  is a business and technology professional with over 25 years experience implementing and supporting various ERP systems and business process re-engineering initiatives across all organizational areas and across various industries, for small, mid-sized, and Fortune 500 companies.  He has held numerous positions in Accounting, Finance, Customer Service and Information Systems.  His application experience includes SAP R/3, Baan, Fourth Shift, Peachtree, MAS 90/200, Quickbooks and Microsoft Dynamics ERP.  His industry experience includes manufacturing, , distribution, telecom, aerospace, life sciences, utilities and media.  Frank studied Business Administration with an Accounting concentration at the University of Pittsburgh.  He is a Microsoft Certified Professional (MCP), Microsoft Certified IT Professional (MCITP), a Microsoft Certified Trainer (MCT), and has been named a Microsoft Most Valuable Professional (MVP) each year since 2008.  He writes articles for Dynamics-related web sites and is a regular speaker at Microsoft Dynamics Convergence, GPUG Summit, MSDynamicsWorld's De

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some questions

Frank, thank you very much for the post. I have several questions though. I went through the standards, particulary IAS 1 (Presentation of Financial Statements) and IAS 7 (Statement of Cash Flows) and couldn't find the background for your points on financial statement formatting:

- The balance sheet, income statement, and cash flows each will be divided into five sections: business, discontinued operations, financing, income taxes, and equity

- The business section of each statement will be further divided into operating and investing assets and liabilities, income, and cash flows

- The Balance Sheet will not list total assets and liabilities. Instead, assets and liabilities will be broken out into financing and business assets and liabilities. Business numbers will be further broken out as operating and investing assets and liabilities. Rather than equalizing assets with liabilities plus equity, assets will be netted against liabilities to come up with equity

- Under the new format, current assets and liabilities are in the operating segment, the investing segment, the financing segment, the tax segment, and the discontinued operations segment.

Could you please source your points with sections from the standards so I can figure it out.

Thank you,

Konstantin

Re; some questions

Hello Konstantin:

These are not adopted standards as yet - they are still in the Discussion phase between the IASB and the FASB. However, to gain more insight, please refer to http://www.iasb.org/NR/rdonlyres/6018B762-AAD5-4BD3-9C8C-0AA7B59C3B68/0/... and http://www.ifrs.org/Current+Projects/IASB+Projects/Financial+Statement+P.... You can also comment on the proposed standards until October 21, 2011 here - http://www.ifrs.org/Current+Projects/IASB+Projects/Annual+Improvements/E....

Hope this helps,

Frank