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.
There are two projects going on simultaneously. The first one is the move to IFRS. The second is a draft of a new statement presentation format. The change in statement presentation format will probably happen sooner than the change to IFRS, but both of these changes demand attention because they will affect everything we do in analyzing financial statements.
And if you are a Microsoft Dynamics GP customer, it will also be important to understand whether your version can support the coming IFRS requirements.
The New Statement Presentation Format
The presentation format of the financial statement will include the following changes:
- The balance sheet, income statement, and cash flows each will be divided into five sections: business, discontinued operations, financing, income taxes, and equity.
- A fourth statement will reconcile the statements of comprehensive income and cash flows.
- The business section of each statement will be further divided into operating and investing assets and liabilities, income, and cash flows.
Where accounts are placed will be based on where management believes they should fall. The operating section will have anything that's integral to the company's business. The investing section ...
FREE Membership Required to View Full Content:
Joining MSDynamicsWorld.com gives you free, unlimited access to news, analysis, white papers, case studies, product brochures, and more. You can also receive periodic email newsletters with the latest relevant articles and content updates.
Learn more about us here