Focus on IFRS 16 Leases
(Source https://www.bdo.global/en-gb/services/audit-assurance/ifrs/ifrs-at-a-glance)
Knowledge base for IFRS Annual Reporting
(Source https://www.bdo.global/en-gb/services/audit-assurance/ifrs/ifrs-at-a-glance)
are two different events, that sometimes interact
– The comparison starts with an overview of the differences and similarities between IFRS and US GAAP, and followed by more detailed differences and similarities on a reporting line level.
Standards Reference
US GAAP1 | IFRS2 |
Topic 35o Intangibles-Goodwill and Other Subtopic 610-20 Other income – Gains and losses from the Derecognition of Nonfinancial Assets Subtopic 720-15 Other expenses – Start-up costs Subtopic 720-35 Other expenses = Advertising costs Topic 730 Research and development arrangements Subtopic 985-20 Software – Costs of software to be sold, leased or marketed |
IAS 38 Intangible assets
SIC-32 Intangible assets – Web site costs
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Note
The following discussion captures a number of the more significant GAAP differences ans similarities under both the above mentioned standards. It is important to note that the discussion is not inclusive of all GAAP differences in this area.
In overview the similarities and differences are as follows:
IFRS 16 amendments Corona Rent concessions provide relief to lessees in accounting for rent concessions.
The amendments to IFRS 16 add an optional practical expedient that allows lessees to bypass assessing whether a rent concession that meets the following criteria is a lease modification:
Lessees who elect this practical expedient account for qualifying rent concessions in the same way as changes under IFRS 16 that are not lease modifications. The accounting will depend on the nature of the concession, but one outcome might be to recognize negative variable lease payments in the period in which the lessor agrees to an unconditional forgiveness of lease payments.
Lessees are required to apply the practical expedient consistently to similar leases and similar concessions. They must also disclose if they elected the practical expedient and for which concessions, as well as the amount recognized in profit and loss in the reporting period to reflect changes in lease payments that arise from rent concessions to which they have applied the practical expedient.
The amendments are effective for reporting periods beginning after June 1, 2020, with early application permitted.
Standards Reference
US GAAP1 |
IFRS2 |
Note
The following discussion captures a number of the more significant GAAP differences under both the impairment standards. It is important to note that the discussion is not inclusive of all GAAP differences in this area.
The significant differences between U.S. GAAP and IFRS related to accounting for the impairment of goodwill, indefinite-lived intangible assets and long-lived assets to be held and used are summarized in the following tables.
– whether in the form of an Operating and Financial Review (OFR), Management Discussion and Analysis (MD&A), a Business Review or other management commentary – is vital to corporate transparency. Key performance indicators (KPIs), both financial and non-financial, are an important component of the information needed to explain a company’s progress towards its stated goals, for all of these types of narrative reporting.
But despite this fact, KPIs are not well understood. What makes a performance indicator “key”? What type of information should be provided for each indicator? And how can it best be presented to provide effective narrative business reporting?
Although narrative reporting requirements remain fluid, reporting on KPIs is here to stay. I welcome any publication as a valuable contribution to helping companies choose which KPIs to report and what information will provide investors with a real understanding of corporate performance. | Using management’s own measures of success really helps deepen investors’ understanding of progress and movement in business. Whether contextual, financial or non-financial, these data points make the trends in the business transparent and help keep management accountable. The illustrations of good practice reporting on KPIs shown here bring alive what is required in a practical and effective way. |
Regulatory environment
The specific requirements for narrative reporting have been a point of debate for several years now. However one certainty remains: the requirement to report financial and non-financial key performance indicators.
IFRS 13 The best Fair value fundamentals discusses the key concepts in the fair value standards, including the definition of fair value, inputs to fair value measurements, and the Read more
Best start with IFRS and US GAAP – Many of the world’s capital markets now require IFRS, or some form thereof, for financial statements of public-interest entities.
The remaining major capital markets without an IFRS mandate are:
Continued global adoption affects multinational businesses, as additional countries permit or require IFRS for statutory reporting purposes and public filings. IFRS requirements elsewhere in the world also impact … Read more
IAS 8 Best summary policies estimates and errors comprises a high level summary of the three items in this standard:
1. Accounting policies |
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Definition: Accounting policies are the specific principles, bases, conventions, rules and practices applied by an entity in preparing and presenting financial statements. |
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Selection and application of accounting policies:
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