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© 2016 Grant Thornton LLPAll rights reservedU.S. member firm of Grant Thornton International Ltd

Comparison between U.S. GAAP andInternational Financial Reporting StandardsApril 2016


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Comparison between U.S. GAAP and International Financial Reporting Standards 2


Contents

1. Introduction ...................................................................................................................................... 5 International standards and the IASB ................................................................................................ 5 Financial accounting and reporting in the United States .................................................................... 5

IFRS and U.S. GAAP comparison ..................................................................................................... 6 2. Overall financial statement presentation ....................................................................................... 9 2.1 General .............................................................................................................................................. 9 2.2 Statement of financial position / balance sheet ................................................................................ 11 2.3 Statement of comprehensive income / income statement ............................................................... 14 2.4 Statement of changes in equity ........................................................................................................ 18 2.5 Statement of cash flows ................................................................................................................... 18 2.6 Non-current assets held for sale and discontinued operations ........................................................ 21

3. Accounting policies – general ...................................................................................................... 26 3.1 Accounting policies ................ .............. ............. ............. ............. .............. ............. ............. ............. 26 3.2 Changes in accounting policies and correction of errors ................................................................. 28

4. Assets ............................................................................................................................................. 31 4.1 Property, plant and equipment ......................................................................................................... 31 4.2 Investment property ......................................................................................................................... 36 4.3 Intangible assets .............................................................................................................................. 40 4.4 Impairment ....................................................................................................................................... 45 4.5 Inventories ........................................................................................................................................ 48

5. Liabilities ......................................................................................................................................... 52 5.1 Leases .............................................................................................................................................. 52 5.1a Leases (IFRS 16) ............................................................................................................................. 57 5.2 Provisions, contingent liabilities, and contingent assets .................................................................. 66 5.3 Taxation ........................................................................................................................................... 69

6. Income and expenditure ................................................................................................................ 76 6.1 Revenue ‒ general ........................................................................................................................... 76 6.1a Revenue ‒ general (IFRS 15) .......................................................................................................... 83 6.2 Revenue ‒ long-term contracts/construction contracts .................................................................... 89 6.3 Employee benefits ............ ............. ............. .............. ............. ............. ............. ............. ............. ....... 91 6.4 Share-based payments .................................................................................................................. 101

7. Financial instruments .................................................................................................................. 107 7.1 Recognition and measurement of financial assets ......................................................................... 109 7.2 Presentation, recognition, and measurement of financial liabilities and equity ............ ............. ..... 113 7.3 Recognition and measurement of derivatives ................................................................................ 118 7.4 Hedge accounting .......................................................................................................................... 120 7.1a Recognition and measurement of financial assets (IFRS 9) .......................................................... 122 7.2a Recognition and measurement of financial liabilities and equity (IFRS 9) ..................................... 131 7.3a Recognition and measurement of derivatives (IFRS 9) ................................................................. 137 7.4a Hedge accounting (IFRS 9) ............................................................................................................ 140

8. Group accounts, associates, equity method investees, and joint ventures ................. ......... 144 8.1 Basic requirements for group accounts .......................................................................................... 144 8.2 Joint arrangements ........................................................................................................................ 155


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8.3 Associates, joint ventures, and equity method investees ‒ equity method .................................... 159

9. Business combinations ............................................................................................................... 165

10. Other matters ................................................................................................................................ 173 10.1 Fair value measurement ................................................................................................................ 173 10.2 Foreign currency translation ........................................................................................................... 179 10.3 Government grants and disclosure of government assistance ...................................................... 187

10.4 Earnings per share ......................................................................................................................... 188 10.5 Events after the reporting period .................................................................................................... 195 10.6 Operating segments ....................................................................................................................... 200 10.7 Related party disclosures ............................................................................................................... 205

Appendix A ............................................................................................................................................. 209 Listing of IFRS standards ........................................................................................................................ 209

Appendix B ............................................................................................................................................. 212 Listing of FASB Codification Topics ........................................................................................................ 212

Appendix C ............................................................................................................................................. 215 U.S. GAAP standards (Accounting Standards Updates (ASUs)) ............................................................ 215

Appendix D ............................................................................................................................................. 218 Listing of pre-codification U.S. GAAP standards ..................................................................................... 218

Appendix E ............................................................................................................................................. 219 Listing of SEC standards ......................................................................................................................... 219

This Grant Thornton LLP document provides information and comments on current accounting issues anddevelopments as of April 2016. It is not a comprehensive analysis of the subject matter covered and is notintended to provide accounting or other advice with respect to the matters addressed. This documentsupports Grant Thornton LLP’s marketing of professional services, and is not written accounting or taxadvice directed at the particular facts and circumstances of any person. If you are interested in the subject ofthis document we encourage you to contact us or an independent accounting or tax adviser to discuss thepotential application to your particular situation. All relevant facts and circumstances, including the pertinentauthoritative literature, need to be considered to arrive at conclusions that comply with matters addressed inthis document.

Moreover, nothing herein shall be construed as imposing a limitation on any person from disclosing the taxtreatment or tax structure of any matter addressed herein. To the extent this document may be considered tocontain written tax advice, any written advice contained in, forwarded with, or attached to this document isnot intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose ofavoiding penalties that may be imposed under the Internal Revenue Code.

For additional information on topics covered in this document, contact your Grant Thornton LLP Adviser.


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Preface

Over 120 countries currently require or permit the use of International Financial Reporting Standards (IFRS). Although public entities in the United States are required to apply U.S. GAAP, the Securities and ExchangeCommission (SEC) continues to explore whether, and if so, when and how to incorporate IFRS into the U.S.financial reporting system.

Currently, the SEC staff is discussing with the SEC Commissioners a potential path to allow domesticregistrants to provide, in addition to U.S. GAAP financial statements, supplemental IFRS financialinformation with reconciliation to U.S. GAAP. The SEC staff’s current thinking is not to require thesupplemental information to be a complete set of financial statements prepared in accordance with IFRS orto require such information to be audited. The SEC also continues to urge the FASB and the IASB tomaintain their commitment to collaboration in support of the objective of a single set of high-quality, globallyaccepted accounting standards.

While the SEC has accepted the financial statements of foreign private issuers prepared using IFRS as issuedby the IASB for several years now, and despite the SEC’s Work Plan regarding the potential use of I FRS bydomestic issuers, a difference in reporting requirements for these two groups of registrants remains, with notimeline for bridging this gap. Standard setters and regulators continue to emphasize the value of convergedaccounting standards, citing the recently issued revenue recognition standard as an example of convergence at

work. However, consistency and comparability of published financial results for domestic versus foreignprivate issuers remains a topic of discussion.

Even though the SEC has delayed making a final decision, many observers still believe that the U.S. capitalmarkets eventually will incorporate IFRS into the U.S. financial reporting system in some manner. In themeantime, it is incumbent on preparers, auditors, and regulators to be aware of the differences that currentlyexist between IFRS and U.S. GAAP.

We have prepared the Comparison between U.S. GAAP and International Financial Reporting Standards (Comparison) to help readers grasp some of the major similarities and differences between IFRS and U.S.GAAP. More emphasis is placed on recognition, measurement, and presentation guidelines, and lessemphasis is placed on disclosure requirements. As more fully explained in Section 1, “Introduction,” thisComparison covers only those differences that we believe are most commonly encountered in practice.

The Comparison includes standards issued as of April 2016. Recently issued guidance included inthis Comparison but that is not yet effective has been shaded in the tables below for those entitiesthat may wish to early adopt the guidance, if permitted. We have included Appendices that list the titles

of all IFRS and U.S. GAAP standards, as well as SEC rules, regulations, and practices, that are referred to inthis document.

The Comparison is written by the IFRS Consulting Group of Grant Thornton LLP. The contributors areSheri Fabian, Partner and Helen Bachman, Managing Director.


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1. IntroductionInternational standards and the IASB

The IASB is responsible for the preparation and issuance of IFRS. Upon its inception in 2001, the IASBadopted the body of International Accounting Standards (IAS) issued by its predecessor, the International

Accounting Standards Committee (IASC).

The IFRS Interpretations Committee (IFRIC) assists the IASB in establishing and improving standards offinancial accounting and reporting for the benefit of users, preparers, and auditors of financial statements.

The IFRIC was established in 2002 when it replaced its predecessor, the Standing Interpretations Committee(SIC).

Under IFRS, when a standard or an interpretation specifically applies to a transaction, other event, orcondition, an entity would apply that guidance as well as any relevant implementation guidance issued by theIASB. In this document, the term “IFRS” refers collectively to standards issued by the IASB, IAS issued bythe IASC, and Interpretations issued by the IFRIC and the SIC.

The IASB uses the guidance in the Conceptual Framework for Financial Reportingto develop or revise IFRS as itestablishes the underlying concepts for the preparation and presentation of financial statements and therecognition and measurement requirements in IFRS.

In May 2015, the IASB issued an exposure draft, Conceptual Framework for Financial Reporting. The IASB hopesthat the proposed amendments to the Conceptual Framework will improve financial reporting by providing amore complete, clearer and updated set of concepts to be used by the IASB in the development of IFRS andothers in understanding and applying IFRS. The proposals include new guidance on measurement, financialperformance, presentation and disclosure, derecognition and the reporting entity. At the same time, the IASBalso issued an exposure draft, Updating References to the Conceptual Framework, which proposes to update, inexisting IFRS, references to the existing Conceptual Framework. The IASB expects to issue a final revisedConceptual Framework by the end of 2016.

In October 2015, the IASB issued an Exposure Draft, IFRS Practice Statement Application of Materiality toFinancial Statements , which would provide guidance to assist management in applying the concept of materialityto general purpose financial statements prepared in accordance with IFRS.

Financial accounting and reporting in the United States

The FASB is the designated private-sector body responsible for establishing and improving standards offinancial accounting and reporting in the United States for nongovernmental public and private enterprises,

including small businesses and not-for-profit organizations. Those standards, collectively referred to as U.S.GAAP, govern the preparation of financial reports and are provided for the guidance and education of thepublic, including issuers, auditors, and users of financial information. The FASB Accounting StandardsCodification TM is the sole source of authoritative nongovernmental GAAP, except SEC guidance.

SEC registrants must also comply with the Commission’s financial reporting requirements, including thosepromulgated in SEC Regulations S-X and S-K, Financial Reporting Releases (FRR), and Staff Accounting


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Bulletins (SAB). The SABs represent practices followed by the staff in administering SEC disclosurerequirements.

In 2012, the Financial Accounting Foundation established the Private Company Council (PCC) to improvethe standard setting process in the U.S. for private companies. The responsibilities of the PCC are to:

Work with the FASB to establish criteria to decide whether and when to make exceptions ormodifications to U.S. GAAP for private companies, and

Serve as the primary advisory body on private companies to the FASB

The final ASUs related to changes to U.S. GAAP for private companies are listed in Appendix C.

In December 2013, the FASB also issued ASU 2013-12, Definition of a Public Business Entity , which adds thatdefinition to the Master Glossary. The definition will be used by the FASB, the PCC, and the EmergingIssues Task Force in setting the scope of future financial accounting and reporting guidance in U.S. GAAP.

The amendments; however, do not impact existing GAAP. Also, the definition of a public business entity is

different than small and medium-sized entities as used by the IASB in providing financial accounting andreporting alternatives for those entities. The definition of small and medium-sized entities under IFRS focuseson whether an entity has public accountability rather than on a cost-benefit basis as used by the FASB insetting accounting and reporting guidance for private entities.

In August 2015, the FASB issued a proposed ASU, Conceptual Framework for Financial Reporting. The proposedamendments would change the definition of materiality in Chapter 3, Qualitative Characteristics of Useful FinancialInformation,to indicate materiality is a legal concept.

The FASB also has projects on its agenda related to measurement and presentation as it relates to theConceptual Framework. The FASB is developing measurement concepts related to the meanings of key terms

and what the objectives and qualitative characteristic imply for measurement, identifying appropriate types formeasurement, and determining which measurements to use in specific circumstances.

As it relates to presentation, the FASB is discussing how to group information in the financial statements andthe association between changes in assets, liabilities and equity instruments and related financial presentation.

IFRS and U.S. GAAP comparison

This Comparison highlights some significant U.S. GAAP and IFRS requirements, as well as the majorsimilarities and differences between the two sets of standards. While not an exhaustive listing, this documenthighlights some of the more significant differences between U.S. GAAP and IFRS that we believe are mostcommonly encountered in practice. The Comparison may be helpful to individuals that are new to IFRS whoare trying to gain an appreciation of the more significant requirements of IFRS and how these requirementsdiffer from those in the United States. Disclosure requirements are not addressed, except in some exceptionalcases where those requirements constitute major differences between U.S. GAAP and IFRS. ThisComparison has been updated for standards issued as of April 2016. Effective dates for standards

vary and are generally noted where relevant.


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Companies reporting under requirements established for the European Union must comply with IFRS asadopted by the European Commission (EC). Those standards may differ from IFRS as issued by the IASBbecause of the timing or scope of endorsement by the EC. Other jurisdictions may have similar endorsement-related differences. Such differences are not addressed in this document.

This Comparison does not address industry-specific requirements for banks, other financial institutions,

insurance companies, not-for-profit organizations, retirement benefit plans, extractive industries, rateregulated activities, or agriculture. In particular, the following IFRS pronouncements have not been includedin the document due to their specialized nature:

IFRS 4, Insurance Contracts

IFRS 6, Exploration for and Evaluation of Mineral Resources

IFRS 14, Regulatory Deferral Accounts

IAS 26, Accounting and Reporting by Retirement Benefit Plans

IAS 41, Agriculture

IFRIC 20, Stripping Costs in the Production Phase of a Surface Mine

In addition, the Comparison does not include IFRS 1, First-time Adoption of International Financial ReportingStandards,as well as International Financial Reporting Standard for Small and Medium-sized Entities( IFRS for SMEs ).IFRS 1 covers the requirements for applying IFRS in a compa ny’s first IFRS financial statements. It starts

with the basic premise that an entity applies IFRS for the first time on a fully retrospective basis. However,acknowledging the cost and complexity of that approach, the standard then establishes various exemptionsfor topics where retrospective application would be too burdensome or impractical (for example, business

combinations and pension liabilities).

In January 2014, the IASB issued IFRS 14, Regulatory Deferral Accountsto permit a first-time adopter of IFRS who recognized regulatory deferral account balances in their financial statements to continue to account forregulatory deferral account balances under its previous GAAP. IFRS 14 is an interim standard as the IASBcontinues to consider the development of guidance for rate-regulated entities, as none currently exists. Thestandard is effective for annual periods beginning on or after January 1, 2016 however, early application isallowed. Guidance on accounting for regulated entities under U.S. GAAP is found in ASC 980.

IFRS for SMEs is designed to meet the financial reporting needs of entities that (a) do not have publicaccountability and (b) publish general purpose financial statements for external users. The term “small and

medium-sized entities” is not associated with any size criteria. The standard has essentially been designed to work as a stand-alone document, with no mandatory cross-references to full IFRS. IFRS for SMEs oftenpermits simplified recognition and measurement requirements and reduces the amount of disclosurescompared to full IFRS. In May 2015, the IASB issued amendments to the IFRS for SMEs , based on theresults of an initial comprehensive review of the guidance. The most significant changes to the guidance areto:


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Allow an option to use the revaluation model for property, plant and equipment

Align the recognition and measurement requirements for deferred income tax with IAS 12

Align the recognition and measurement requirements for exploration and evaluation assets with IFRS 6

The amendments to the IFRS for SMEs are effective for annual periods beginning on or after January 1, 2017, with early application permitted.

This Comparison is only a guide; it is not all-encompassing. For the complete details of IFRS and U.S. GAAPrequirements, as well as SEC rules, regulations, and practices, readers should refer to the complete text of thestandards, rules, regulations, and practices themselves.


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2. Overall financial statement presentationProposed amendments to IAS 1

In February 2015, the IASB issued an Exposure Draft, Classification of Liabilities - Proposed amendments to IAS 1.The proposed amendments clarify that the classification of liabilities as current or non-current is based on the rights in

existence at the end of the reporting period. The proposals also clarify the link between the settlement of the liabilityand the outflow of resources from the entity by indicating that settlement refers to the transfer to the counterparty ofcash, equity instruments, other assets, or services.

Simplifying the balance sheet classification of debt

The FASB has a project to simplify the balance sheet classification of debt, which would provide guidance that willreduce the cost and complexity of determining the current versus noncurrent balance sheet classification of debt. Aproposed ASU is expected in Q2-2016.

Materiality

In October 2015, the IASB issued a draft IFRS Practice Statement, Application of Materiality to Financial Statements ,which would help company management determine whether information is material. Information is material if omittingor misstating it could influence decisions that users make on the basis of financial information about a specificreporting entity. The guidance is part of the IASB’s wider initiative to improve disclosur es.

In September 2015, the FASB issued an Exposure Draft, Notes to Financial Statements (Topic 235): AssessingWhether Disclosures are Material . The proposed amendments would clarify the way materiality would be consideredwhen assessing requirements for providing information in the notes to financial statements. However, the proposedamendments would not change any specific disclosure requirements.

2.1 General

IFRS U.S. GAAP

Relevant guidance: IAS 1 Relevant guidance: ASC 205 and 505; SEC RegulationS-X, Article 3

An entity applies IAS 1 in preparing and presenting

general purpose financial statements in accordance withIFRS (IAS 1.2).

The guidance on the presentation of financial statements

is primarily included in the FASB Codification (ASC 205through 280). SEC registrants are also required to followthe guidance in SEC Regulations, such as RegulationS-X and S-K.

Financial statements comprise (IAS 1.10):

Statement of financial position as at the end of theperiod

Statement of profit or loss and other comprehensiveincome for the period

Statement of changes in equity for the period

Statement of cash flows for the period

Notes, comprising a summary of significantaccounting policies and other explanatoryinformation

Comparative information for the preceding period asspecified in IAS 1.38 and .38A

Statement of financial position as at the beginning ofthe preceding period when an entity applies anaccounting policy retrospectively or makes a

Financial statements comprise (ASC 205-10-45-1A):

Statement of financial position / balance sheet

Income statement

Statement that displays total comprehensive incomeeither in a single continuous financial statement or intwo separate but consecutive financial statements(ASC 220-10-45-1)

Statement of changes in stockholders’ equity. Alternatively, disclosure of changes in the separateaccounts comprising stockh olders’ equity (inaddition to retained earnings) could be made in thenotes to financial statements (ASC 505-10-50-2).

Statement of cash flows (limited exemptions; seeSection 2.5, “Statement of cash flows”)

Notes to financial statements


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IFRS U.S. GAAPretrospective restatement of items in its financialstatements, or it reclassifies items in its financialstatements in accordance with IAS 1.40A through.40D

Unlike IFRS, no similar requirement for a thirdbalance sheet

Except when IFRS permit or require otherwise, an entitypresents comparative information for the precedingperiod for all amounts reported in the current period’sfinancial statements. An entity includes comparativeinformation for narrative and descriptive information if itis relevant to understanding the current period’s financialstatements (IAS 1.38 and .38B).

An entity presents, at a minimum, two statements offinancial position, two statements of profit or loss andother comprehensive income, two separate statementsof profit or loss (if presented), two statements of cashflows, two statements of changes in equity, and relatednotes (IAS 1.38A).

Unlike IFRS, there is no specific requirement to providecomparative statements but it is desirable to do so(ASC 205-10-45-2).

SEC rules require balance sheets for the two mostrecent fiscal years and three years of statements ofincome and cash flows (SEC Regulation S-X;Rule 3-01(a) and Rule 3-02(a)).

An entity whose financial statements comply with IFRSmakes an explicit and unreserved statement of suchcompliance in the notes. An entity does not describefinancial statements as complying with IFRS unless theycomply with all the requirements of IFRS (IAS 1.16).

No similar requirement.

An entity may present comparative information inaddition to the minimum comparative financialstatements noted above as long as that information isprepared in accordance with IFRS. The comparativeinformation may consist of one or more statementsreferred to in IAS 1.10, but need not comprise acomplete set of financial statements. The entity includesrelated note information for those additional financialstatements (IAS1.38C and D).

In any one year it is ordinarily desirable that thestatement of financial position, income statement, andstatement of changes in equity be presented for one ormore preceding years, as well as for the current year(ASC 205-10-45-2).

An entity cannot rectify inappropriate accounting policiesby disclosure of the accounting policies used or by notesor explanatory material (IAS 1.18).

Similar to IFRS.

An entity clearly identifies each financial statement andthe notes. In addition, an entity displays the followinginformation prominently, and repeats it when necessaryfor the information presented to be understandable(IAS 1.51):

Name of reporting entity or other means ofidentification, and any change in that information

from the end of the preceding reporting period Whether financial statements are of an individual

entity or a group of entities

Date of end of reporting period or period covered bythe set of financial statements or notes

Presentation currency; as defined in IAS 21

Similar to IFRS.


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IFRS U.S. GAAP

Level of rounding used in presenting amounts infinancial statements

2.2 Statement of financial position / balance sheet

IFRS U.S. GAAP

Relevant guidance : IAS 1 Relevant guidance : ASC 210, 470, 505, and 740; SECRegulation S-X, Rule 5-02

Introduction

IAS 1.54 specifies the line items that are to be presentedon the face of the statement of financial position.

Unlike IFRS, U.S. GAAP does not prescribe a standardformat. However, SEC Regulation S-X, Rule 5-02 doesrequire specific line items to appear on the face of thebalance sheet, where applicable.

Classification An entity presents current and non-current assets, andcurrent and non-current liabilities, as separateclassifications in its statement of financial position inaccordance with IAS 1.66-.76, except when apresentation based on liquidity provides information thatis reliable and more relevant. When that exceptionapplies, an entity presents all assets and liabilities inorder of liquidity (IAS 1.60).

The balance sheets of most entities show separateclassifications of current assets and liabilities (ASC 210-10-05-4). In certain specialized industries an unclassifiedbalance sheet is used when the distinction betweencurrent and noncurrent assets and liabilities is deemed tohave little or no relevance.

Except when deemed relevant to an understanding of theentity’s financial position, no subtotals are specified inIAS 1 (IAS 1.55 and .55A).

Unlike IFRS, non-SEC reporting entities are required topresent a total of current liabilities if they present aclassified balance sheet. In practice, these entities also

present a subtotal for current assets (ASC 210-10-45-5).SEC rules explicitly require subtotals for current assetsand current liabilities (Regulation S-X, Rule 5-02).

When an entity presents current and non-current assetsand current and non-current liabilities as separateclassifications in its statement of financial position, it doesnot classify deferred tax assets (liabilities) as currentassets (liabilities) (IAS 1.56).

Unlike IFRS, deferred tax assets and liabilities areseparated into current and non-current amounts(ASC 740-10-45-4) . (See Section 5.3, “Taxation”)

Note: In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740), Balance SheetClassification of Deferred Taxes. Deferred tax assets andliabilities will now be classified as noncurrent in aclassified statement of financial position, which alignswith IFRS. The amendments are effective for publicbusiness entities for financial statements issued forannual periods beginning after December 15, 2016 andinterim periods within those annual periods. Theamendments are effective for all other entities for annualperiods beginning after December 15, 2017 and interimperiods within annual periods beginning after December15, 2018. Early adoption is permitted. Prospective orretrospective application is permitted.


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IFRS U.S. GAAP

An entity classifies an asset as current when any of thefollowing apply (IAS 1.66):

It expects to realize the asset, or intends to sell orconsume it, in its normal operating cycle. The normaloperating cycle where not clearly identifiable isassumed to be 12 months (IAS 1.68).

It holds the asset primarily for the purpose of trading

It expects to realize the asset within 12 months afterthe reporting period

The asset is cash or a cash equivalent (as defined inIAS 7) unless the asset is restricted from beingexchanged or used to settle a liability for at least12 months after the reporting period

Current assets are cash and other assets or resourcescommonly identified as those reasonably expected to berealized in cash or sold or consumed during the normaloperating cycle of the business (ASC Master Glossary,“Current Assets”).

In businesses where the period of the operating cycle ismore than 12 months, the longer period is required to beused. Where a particular business has no clearly definedoperating cycle, the one-year rule governs (ASC 210-10-45-3).

An entity classifies a liability as current when any of thefollowing apply (IAS 1.69):

It expects to settle the liability in its normal operatingcycle. The normal operating cycle where not clearlyidentifiable is assumed to be 12 months (IAS 1.70).

It holds the liability primarily for the purpose oftrading

The liability is due to be settled within 12 monthsafter the reporting period

The entity does not have an unconditional right todefer settlement of the liability for at least 12 monthsafter the reporting period

Current liabilities are obligations whose liquidation isreasonably expected to require the use of existingresources properly classifiable as current assets, or thecreation of other current liabilities (ASC Master Glossary,“Current Liabilities”).

An entity classifies its financial liabilities as current whenthey are due to be settled within 12 months after thereporting period, even if (IAS 1.72):

The original term was for a period longer than12 months, and

An agreement to refinance, or to reschedulepayments, on a long-term basis is completed afterthe reporting period and before the financialstatements are authorized for issue

If an entity expects, and has the discretion, to refinanceor roll over an obligation for at least 12 months after thereporting period under an existing loan facility, itclassifies the obligation as noncurrent, even if it wouldotherwise be due within a shorter period. If refinancing or

rolling over the obligation is not at the discretion of theentity, the entity does not consider the potential torefinance the obligation and classifies the obligation ascurrent (IAS 1.73).

Short-term obligations, are excluded from currentliabilities if the entity intends to refinance the obligationon a long-term basis and (ASC 470-10-45-14):

Before the balance sheet is issued or available to beissued there is a post-balance sheet issuance of along-term obligation or equity securities for thepurpose of refinancing the short-term obligation on along-term basis; or

Before the balance sheet is issued or available to beissued the entity has entered into a financingagreement that permits it to refinance the short-termobligation on a long-term basis and certainconditions are met

An entity classifies a liability as current at the end of thereporting period, if it does not have an unconditional rightto defer its settlement for at least 12 months after thatdate. When an entity breaches a provision of a long-term

An entity classifies as current a long-term obligation thatis or will be callable by a creditor because of the entity’sviolation of a provision of the debt agreement at thebalance sheet date or because the violation, if not cured


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IFRS U.S. GAAPloan arrangement on or before the end of the reportingperiod with the effect that the liability becomes payableon demand, it classifies the liability as current, even if thelender has agreed, after the reporting period and beforeauthorization of the financial statements for issue, not todemand payment as a consequence of the breach

(IAS 1.74).

within a specified grace period, will make the obligationcallable unless (ASC 470-10-45-11):

The creditor has waived or subsequently lost theright to demand repayment for more than one year(or operating cycle, if longer) from the balance sheetdate; or

For long-term obligations containing a grace periodwithin which the entity may cure the violation, it isprobable that the violation will be cured within thatperiod

Unlike IFRS, the debt would be classified as noncurrent ifthe lender has agreed, after the reporting period andbefore the financial statements are issued or areavailable to be issued, not to demand payment as aconsequence of the violation (ASC 470-10-45-14).

Offsetting

An entity does not offset assets and liabilities or income

and expenses, unless required or permitted by an IFRS(IAS 1.32). See Section 7, “Financial instruments” forfurther information on offsetting.

Unlike IFRS, offsetting is permitted only when a right of

set-off exists. A right of set-off exists when(ASC 210-20-45-1):

The parties owe each other determinable amounts

There is a right and intention to set-off

The right of set-off is enforceable by law

See Sectio n 7, “Financial instruments” for furtherinformation on offsetting.

Disclosure

An entity discloses, either in the statement of financialposition or in the notes, further subclassifications of the

line items presented, classified in a manner appropriateto the entity’s operations (IAS 1.77).

Similar to IFRS.

An entity discloses the following information, either in thestatement of financial position or the statement ofchanges in equity, or in the notes (IAS 1.79):

For each class of share capital:

The number of shares authorized

The number of shares issued and fully paid, andissued but not fully paid

Par value per share, or that the shares have nopar value

A reconciliation of the number of sharesoutstanding at the beginning and at the end ofthe period

The rights, preferences, and restrictionsattaching to that class including restrictions onthe distributions of dividends and the repaymentof capital

Disclosure of changes in the separate accountscomprising stockholders' equity (in addition to retainedearnings) and the changes in the number of shares ofequity securities is required. These disclosures may bemade in the notes to the financial statements or througha separate financial statement (ASC 505-10-50-2).

An explanation of the pertinent rights and privileges ofthe various securities outstanding is disclosed.Disclosure of the number of shares issued uponconversion, exercise, or satisfaction of required

conditions during at least the most recent annual fiscalperiod and any subsequent interim period presented isalso required (ASC 505-10-50-3).


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IFRS U.S. GAAP

Shares in the entity held by the entity or by itssubsidiaries or associates

Shares reserved for issue under options andcontracts for the sale of shares, including termsand amounts

A description of the nature and purpose of eachreserve within equity

2.3 Statement of comprehensive income / income statement

IFRS U.S. GAAP

Relevant guidance : IAS 1 Relevant guidance : ASC 220, 225, 320, 715, and 810;SEC Regulation S-X, Rule 5-03

Statement format and presentation

An entity may present either a single statement of profitor loss and other comprehensive income or two separatestatements (IAS 1.10A).

Similar to IFRS, an entity may report comprehensiveincome either in a single continuous statement or in twoseparate but consecutive financial statements (ASC 220-10-45-1).

Single statement of comprehensive income

If a single statement of profit or loss and othercomprehensive income (statement of comprehensiveincome) is presented, profit or loss and othercomprehensive income are presented in two sectionswith the profit or loss section presented first followeddirectly by the other comprehensive income section(IAS 1.10A).

In addition to the profit or loss and other comprehensiveincome sections, the statement of comprehensive incomepresents (IAS 1.81A):

Profit or loss

Total other comprehensive income

Comprehensive income for the period, being thetotal of profit or loss and other comprehensiveincome

An entity also presents the following items, in addition tothe profit or loss and other comprehensive incomesections, as allocation of profit or loss and other

comprehensive income for the period (IAS 1.81B): Profit or loss for the period attributable to:

Non-controlling interests

Owners of the parent

Comprehensive income for the period attributable to:


Single statement of comprehensive income

Similar to IFRS (ASC 220-10-45-1A and 45-5).


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IFRS U.S. GAAP


Two separate statements

If an entity presents two separate statements, theseparate statement of profit or loss immediately precedesthe statement presenting comprehensive income, which

begins with profit or loss (IAS 1.10A).The separate statement of profit or loss includes thefollowing as allocation of profit or loss for the period(IAS 1.81B):

Profit or loss for the period attributable to:



The separate statement presenting comprehensiveincome includes the following as allocation of othercomprehensive income for the period:

Comprehensive income for the period attributable to:



Two separate statements

Similar to IFRS (ASC 220-10-45-1B and 45-5).

General

IAS 1 does not require a specific format for the statementof comprehensive income; however, it does requirecertain minimum line items to be presented for the periodin addition to those required by other IFRS (IAS 1.82).

Expenses recognized in profit or loss are presentedbased on either their nature or function within the entitydepending on which is reliable and more relevant

(IAS1.99). If an entity classifies expenses by function, itdiscloses additional information on the nature ofexpenses, including depreciation and amortizationexpense and employee benefits expense (IAS 1.104).

The other comprehensive income section presents lineitems for the amounts for the period of (IAS 1.82A):

Items of other comprehensive income includingamounts below, classified by nature and groupedinto those that

Will not be reclassified subsequently to profit orloss

Will be reclassified subsequently to profit or losswhen specific conditions are met

The share of the other comprehensive income ofassociates and joint ventures accounted for usingthe equity method separated into the share of itemsthat

Will not be reclassified subsequently to profit orloss

General

U.S. GAAP does not prescribe a standard format for theincome statement. Either the single-step format(expenses are classified by function) or multiple-stepformat (operating and nonoperating items are displayedseparately) is acceptable. However, SEC RegulationS-X, Rule 5-03 requires specific line items to appear onthe face of the income statement, where applicable.


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IFRS U.S. GAAP

Will be reclassified subsequently to profit or losswhen specific conditions are met

Other comprehensive income

Other comprehensive income comprises items of incomeand expense (including reclassification adjustments) that

are not recognized in profit or loss as required orpermitted by IFRS. Examples of items in othercomprehensive income (OCI) include (IAS 1.7):

Exchange differences on translating foreignoperations (IAS 21)

Gains and losses from investments in equityinstruments measured at fair value through othercomprehensive income (IFRS 9.5.7.5)

Gains and losses on financial assets measured atfair value through other comprehensive income(IFRS 9.4.1.2A)

For particular liabilities designated as at fair valuethrough profit or loss, the amount of the change infair value that is attributable to changes in theliability’s cre dit risk (IFRS 9.5.7.7)

Effective portion of gains and losses on hedginginstruments in cash flow hedges and the gains andlosses on hedging instruments that hedgeinvestments in equity instruments measured at fairvalue through other comprehensive income(IFRS 9.5.7.5)

Changes in value of the time value of options whenseparating intrinsic value and time value of an optioncontract and designating as hedging instrument onlythe changes in intrinsic value (IFRS 9.6.2.4(a))

Changes in value of forward elements of forwardcontracts when separating forward and spotelements and designating as hedging instrumentonly changes in spot elements and changes in valueof foreign currency basis spread of financialinstrument, excluding it as a hedging instrument(IFRS 9.6.2.4(b))

Effective portion of gains and losses on hedginginstruments in cash flow hedges (IAS 39)

Changes in revaluation surplus (IAS 16 and IAS 38)

Remeasurements of defined benefit pension plans(IAS 19)

Other comprehensive income

Other comprehensive income comprises revenues,expenses, gains, and losses that are included in

comprehensive income but excluded from net income(see Master Glossary, “Other Comprehensive Income”).Examples of items that are required to be reported asother comprehensive income include (ASC 220-10-45-10A through 10B):

Foreign currency translation adjustments (ASC 830-30-45-12)

Gains and losses on foreign currency transactionsdesignated as and effective as, economic hedges ofa net investment in a foreign entity (ASC 830-20-35-3(a))

Gains and losses on intra-entity foreign currencytransactions that are of a long-term investmentnature when the entities to the transaction areconsolidated, combined or accounted for by theequity method (ASC 830-20-35-3(b))

Gains or losses associated with pension or otherpostretirement benefits (ASC 715-20-50-1(j))

Prior service costs or credits associated with pensionor other postretirement benefits (ASC 715-20-50-1(j))

Transition assets or obligations associated withpension or other postretirement benefits (ASC 715-20-50-1(j))

Unrealized holding gains and losses on available-for-sale securities (ASC 320-10-45-1)

Unrealized holding gains and losses from a debtsecurity transferred into the available-for-salecategory from the held-to-maturity category (ASC320-10-35-10(c))

Amounts recognized in OCI for debt securitiesclassified as available-for-sale and held-to-maturityrelated to an other-than-temporary impairment (ASC320-10-35)

Subsequent decreases (if not other-than-temporary

impairment) or increases in the fair value ofavailable-for-sale securities previously written downas impaired (ASC 320-10-35-18)

Effective portion of gains and losses on derivativeinstruments in cash flow hedges (ASC 815-20-35-1(c))


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IFRS U.S. GAAP

Other comprehensive income – reclassificationadjustments

Reclassification adjustments are amounts reclassified toprofit or loss in the current period that were recognized inOCI in the current or previous periods (IAS 1.7).

Reclassification adjustments may be presented either inthe statement(s) of profit or loss and othercomprehensive income or in the notes (IAS 1.94 and.112-.138).

An entity discloses reclassification adjustments relating tocomponents of OCI (IAS 1.92).

Other IFRS specify whether and when amountspreviously recognized in OCI are reclassified to profit orloss. Such reclassifications are referred to in IAS 1 asreclassification adjustments. A reclassification adjustmentis included with the related component of OCI in theperiod that the adjustment is reclassified to profit or loss.

These amounts may have been recognized in OCI asunrealized gains in the current or previous periods.Those unrealized gains are deducted from OCI in theperiod the realized gains are reclassified to profit or lossto avoid including them in total comprehensive incometwice (IAS 1.93).

Entities using IFRS report fewer amounts in OCI, andthey are not required to subsequently reclassify allamounts of accumulated OCI to net income (profit orloss). However, the disclosure requirements under IAS 1do not include the specific presentation requirements of

ASC 220-10-45.

Other comprehensive income – reclassificationadjustments

Reclassification adjustments are made to avoid doublecounting in comprehensive income items displayed aspart of net income for a period that also have beendisplayed as part of OCI in that period or earlier periods(ASC Master Glossary, “Reclassification adjustments”).

An entity presents reclassification adjustments out ofaccumulated OCI either on the face of the statementwhere OCI is presented or in the notes (ASC 220-10-45-17).

Nonpublic entities are required to (1) comply with therequirements for annual reporting periods and (2) reportinformation about the amounts reclassified out ofaccumulated OCI by component for each reportingperiod. However, nonpublic entities are not required toreport the effects of reclassifications on net income ininterim reporting periods (ASC 220-10-45-18B). Not-for-

profit entities that report under ASC 958-205 areexcluded from the scope of these requirements (ASC220-10-15-3).

Other comprehensive income – income tax An entity may present components of othercomprehensive income either (a) net of related taxeffects, or (b) before related tax effects with one amountshown for the aggregate amount of income tax relating tothose components. If an entity elects alternative (b), itallocates the tax between the items that might bereclassified subsequently to the profit or loss section andthose that will not be reclassified subsequently to theprofit or loss section (IAS 1.91).

Other comprehensive income – income taxSimilar to IFRS (ASC 220-10-45-11).

Presentation and disclosure

An entity does not present any items of income orexpense as extraordinary items, in the statement(s)presenting profit or loss and other comprehensive incomeor in the notes (IAS 1.87).

Similar to IFRS, under U.S. GAAP an entity does notpresent any items of income or expense as extraordinaryitems in the statements(s) presenting profit or loss andother comprehensive income or in the notes (ASC 225-20-45).

When items of income or expense are material, an entitydiscloses their nature and amount separately (IAS 1.97).

A material event or transaction that an entity considers tobe of an unusual nature or of a type that indicatesinfrequency of occurrence or both is reported as aseparate component of income from continuing


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IFRS U.S. GAAPoperations. The nature and financial effects of each eventor transaction is presented as a separate component ofincome from continuing operations or, alternatively,disclosed in notes to the financial statements (ASC 225-20-45-16).

2.4 Statement of changes in equity

IFRS U.S. GAAP

Relevant guidance : IAS 1 Relevant guidance : ASC 505 and 810

Introduction

An entity presents a statement of changes in equity thatdisplays (IAS 1.106):

Total comprehensive income for the period, showingseparately the total amounts attributable to owners

of the parent and to non-controlling interests For each component of equity, the effects of

retrospective application or retrospectiverestatement recognized in accordance with IAS 8

For each component of equity, a reconciliationbetween the carrying amount at the beginning andthe end of the period, separately disclosing changesresulting from:

Profit or loss

Each item of OCI

Transactions with owners in their capacity asowners, showing separately contributions byand distributions to owners and changes inownership interests in subsidiaries that do notresult in a loss of control

An entity presents, either in the statement of changes inequity or in the notes:

The amount of dividends recognized as distributionsto owners during the period and the amount pershare (IAS 1.107)

For each component of equity, an analysis of OCI byitem (IAS 1.106A)

If both financial position and results of operations arepresented, an entity discloses changes in the separateaccounts comprising shareholder’s equity (in addition toretained earnings) and changes in the number of shares

of equity securities in either a statement of changes instockholders’ equity, the basic statements, or in the notesto financial statements (ASC 505-10-50-2).

A parent with one or more less-than-wholly-ownedsubsidiaries discloses for each reporting period either inthe consolidated statement of changes in equity, ifpresented, or in the notes to consolidated financialstatements, a reconciliation at the beginning and the endof the period of the carrying amount of total equity, equityattributable to the parent, and equity attributable to thenoncontrolling interest. That reconciliation separatelydiscloses (ASC 810-10-50-1A):

Net income Each component of OCI

Transactions with owners acting in their capacity asowners, showing separately contributions from anddistributions to owners

2.5 Statement of cash flows

IFRS U.S. GAAP

Relevant guidance : IAS 7; IFRS 5 Relevant guidance : ASC 230 and 830


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IFRS U.S. GAAP

Introduction

All entities are required to present a statement of cashflows that provides information about its historicalchanges in cash and cash equivalents (IAS 7.1 and .4).

Similar to IFRS, except a statement of cash flows is notrequired to be provided by (ASC 230-10-15-4):

Defined benefit pension plans and certain otheremployee benefit plans that present financial

information in accordance with ASC 960 Certain investment companies that meet specified

criteria

Cash and cash equivalents

Cash comprises cash on hand and demand deposits(IAS 7.6).

Cash equivalents are short-term, highly liquidinvestments that are readily convertible to knownamounts of cash and which are subject to an insignificantrisk of changes in value (IAS 7.6). Cash equivalents areheld for the purpose of meeting short-term cash

commitments rather than for investment or otherpurposes. An investment normally qualifies as a cashequivalent only when it has a short maturity of, say, threemonths or less from the date of acquisition (IAS 7.7).

Similar to IFRS (ASC Master Glossary, “Cash” and “CashEquivalents”).

In some countries, bank overdrafts which are repayableon demand form an integral part of an entity's cashmanagement. Those bank overdrafts are included as acomponent of cash and cash equivalents. Acharacteristic of such banking arrangements is that thebank balance often fluctuates from being positive tooverdrawn. Bank borrowings are generally considered tobe financing activities (IAS 7.8).

Unlike IFRS, bank overdrafts are included in liabilitiesand excluded from cash equivalents. Changes inoverdraft balances are financing activities.

Presentation and disclosure

The statement of cash flows reports cash flows duringthe period classified by the following (IAS 7.10):

Operating activities

Investing activities

Financing activities

Cash flows from operating activities are reported usingeither the direct or the indirect method (IAS 7.18).

Note: In January 2016, the IASB issued DisclosureInitiative (Amendments to IAS 7). The purpose of the

a mendments is to improve disclosures about an entity’sfinancing activities and changes in related liabilities. Anentity is required to provide disclosures that enable usersof financial statements to evaluate changes in liabilitiesarising from financing activities, including both changesarising from cash flows and non-cash changes. Theamendments are effective for annual periods beginningon or after January 1, 2017, with earlier applicationpermitted.

Similar to IFRS (ASC 230-10-45-10, 45-25, and 45-28).

Note : In January 2016, the FASB issued a proposed ASU, Statement of Cash Flows (Topic 230):

Classification of Certain Cash Receipts and CashPayments (a consensus of the FASB Emerging IssuesTask Force) , which addresses eight specific cash flowissues. The proposal aims to reduce the existing diversityin practice in how certain cash receipts and payments arepresented and classified in the financial statements.


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IFRS U.S. GAAP

Cash flows arising from the following operating,investing, or financing activities may be reported on a netbasis (IAS 7.22):

Cash receipts and payments on behalf of customerswhen the cash flows reflect the activities of thecustomer rather than those of the entity

Cash receipts and payments for items in which theturnover is quick, the amounts are large, and thematurities are short

Receipts and payments are generally shown gross.Certain items may be presented net because theirturnover is quick, the amounts are large, and thematurities are short. Items that qualify for net reportingare cash flows pertaining to (a) investments (other thancash equivalents), (b) loans receivable, and (c) debt,

provided that the original maturity of the asset or liabilityis three months or less (ASC 230-10-45-7 through 45-9).

Interest and dividends received and paid are classified ina consistent manner from period to period as operating,investing, or financing activities (IAS 7.31 and .33).

Interest paid and interest and dividends received areusually classified as operating cash flows for a financialinstitution (IAS 7.33).

Interest and dividends received and interest paid (andexpensed) are classified as operating activities(ASC 230-10-45-25b and 45-25e).

Dividends paid are classified as financing activities(ASC 230-10-45-15).

Taxes paid are classified as cash flows from operatingactivities unless they can be specifically identified withfinancing and investing activities (IAS 7.35-.36).

Taxes are generally classified as operating activities(ASC 230-10-45-17c).

Disclose in the notes or in the financial statements theamount of the net cash flows attributable to theoperating, investing, and financing activities ofdiscontinued operations (IFRS 5.33(c)).

Unlike IFRS, separate disclosure of cash flows related todiscontinued operations is not required to be presented innet cash provided or used by operating, investing, andfinancing activities and the net effect of those cash flowson cash and cash equivalents. An entity that neverthelesschooses to report separately operating cash flows ofdiscontinued operations does so consistently for allperiods affected, which may include periods long aftersale or liquidation of the operation. (ASC 230-10-45-24).

Disclose either on the face of the cash flows statement or

in the notes to the financial statements, related todiscontinued operations on the statement of cash flows(ASC 230-10-45-24 and 205-20-50-5B(c)):

Total operating and investing cash flows of thediscontinued operation for the periods in which theresults of operations of the discontinued operationare presented in the statement where net income isreported

Depreciation, amortization, capital expenditures, andsignificant operating and investing noncash items ofthe discontinued operation for the periods where theresults of operations of the discontinued operationare presented in statement where net income isreported

An entity discloses the components of cash and cashequivalents and presents a reconciliation of the amountsin its statement of cash flows with the equivalent items inthe statement of financial position (IAS 7.45).

An entity discloses its policy for determining which itemsare treated as cash equivalents (ASC 230-10-50-1). Totalcash and cash equivalents at the beginning and end ofthe period shown in the statement of cash flows are to bethe same as similarly titled line items or subtotals in thebalance sheet (ASC 230-10-45-4).


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2.6 Non-current assets held for sale and discontinued operations

IFRS U.S. GAAP

Relevant guidance : IFRS 5 and 13 Relevant guidance : ASC 205, 230, 360, and 810

Introduction

A discontinued operation is a component of an entity thateither has been disposed of, or is classified as held forsale, and (IFRS 5.32):

Represents a separate major line of business orgeographical area of operations

Is part of a single coordinated plan to dispose of aseparate major line of business or geographical areaof operations; or

Is a subsidiary acquired exclusively with a view toresale

A component of an entity comprises operations and cashflows that can be clearly distinguished, operationally andfor financial reporting purposes, from the rest of theentity. A component of an entity will have been a cash-generating unit or a group of cash-generating units whilebeing held for use (IFRS 5.31).

A cash-generating unit is the smallest identifiable groupof assets that generates cash inflows that are largelyindependent of the cash inflows from other assets orgroups of assets (IFRS 5, Appendix A).

A discontinued operation may include a component of anentity or group of components of an entity, or a businessor nonprofit activity (ASC 205-20-45-1A).

A component of an entity or a group of components of anentity is reported in discontinued operations if thedisposal represents a strategic shift that has, or willhave, a major effect on an entity’s operations andfinancial results when any of the following occur (ASC205-20-45-1B):

The component or group of components of an entity

meets the criteria in ASC 205-20-45-1E as held forsale

The component or group of components of an entityis disposed of by sale

The component or group of components of an entityis disposed of other than by sale (by abandonmentor in a distribution to owners in a spinoff) ( ASC 360-10-45-15)

A strategic shift that has, or will have a major effect onan entity’s operations and financial results could includea disposal of a major geographical area, major line ofbusiness, major equity method investment or other majorparts of an entity (ASC 205-20-45-1C).

A component of an entity comprises operations and cashflows that can be clearly distinguished, operationally andfor financial reporting purposes, from the rest of theentity. Unlike IFRS, a component of an entity may be areportable segment or an operating segment; a reportingunit; a subsidiary; or an asset group (all as defined in the

ASC Master Glossary) (ASC Master Glossary,“Component of an Entity”).

Held for sale

Classify a non-current asset (disposal group) as held for

sale if its carrying amount will be recovered principallythrough a sale transaction rather than through continuinguse (IFRS 5.6).

The asset (disposal group) must be available forimmediate sale in its present condition subject only toterms that are usual and customary for sales of suchassets (disposal groups) and its sale must be highly

probable (IFRS 5.7).

An entity classifies a component or group of components

of an entity or a long lived asset (disposal group) as heldfor sale when it satisfies the criteria listed below thatdemonstrate that the entity is sufficiently committed to aplan to sell (ASC 205-20-45-1E and 360-10-45-9 through45-14):

Management, having the authority to approve theaction, commits to a plan to sell the asset (disposalgroup)


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IFRS U.S. GAAP

For the sale to be highly probable (IFRS 5.8):

The appropriate level of management must becommitted to a plan to sell the asset (disposalgroup)

An active program to locate a buyer and completethe plan must have been initiated

The asset (disposal group) must be activelymarketed for sale at a price that is reasonable inrelation to its current fair value

The sale is expected to qualify for recognition as acompleted sale within one year from the date ofclassification (the one year limit is extended ifconditions in IFRS 5, Appendix B apply)

Actions required to complete the plan are required toindicate that it is unlikely that significant changes tothe plan will be made or that it will be withdrawn

The probability of shareholders’ approval (if required inthe jurisdiction) is considered as part of the assessmentof whether the sale is highly probable (IFRS 5.8).

A disposal group is a group of assets to be disposed of,by sale or otherwise, together as a group in a singletransaction, and liabilities directly associated with thoseassets that will be transferred in the transaction(IFRS 5, Appendix A).

An entity that is committed to a sale plan involving loss ofcontrol of a subsidiary classifies all the assets andliabilities of that subsidiary as held for sale when thecriteria in IFRS 5.6-.8 are met, regardless of whether theentity will retain a non-controlling interest in its former

subsidiary after the sale (IFRS 5.8A).

The asset (disposal group) is available forimmediate sale in its present condition subject onlyto terms that are usual and customary for sales ofsuch assets (disposal groups)

An active program to locate a buyer and otheractions required to complete the plan to sell theasset (disposal group) has been initiated

The sale of the asset (disposal group) is probable,and transfer of the asset (disposal group) isexpected to qualify for recognition as a completedsale within one year except as permitted by

ASC 360-10-45-11

The asset (disposal group) is being activelymarketed for sale at a price that is reasonable inrelation to its current fair value

Actions required to complete the plan indicate it isunlikely that significant changes to the plan will bemade or that it will be withdrawn

A disposal group for long-lived asset(s) to be disposed ofby sale or otherwise represents assets to be disposed oftogether as a group in a single transaction and liabilitiesdirectly associated with those assets that will betransferred in the transaction. A disposal group mayinclude a discontinued operation along with other assetsand liabilities that are not part of the discontinuedoperation (ASC Master Glossary, “Disposal group”).

Measurement

Measurement of non-current assets (disposal groups)classified as held for sale

An entity measures a non-current asset (disposal group)classified as held for sale (held for distribution) at thelower of its carrying amount and fair value less costs tosell (distribute) (IFRS 5.15 and .15A).

Recognition of impairment losses and reversals

An impairment loss is recognized for any initial orsubsequent write-down of the asset (disposal group) tofair value less costs to sell, to the extent that it has notbeen recognized in accordance with IFRS 5.19(IFRS 5.20).

A gain is recognized for any subsequent increase in fairvalue less costs to sell of an asset, but not in excess ofthe cumulative impairment loss that has been recognizedeither in accordance with IFRS 5 or previously inaccordance with IAS 36 (IFRS 5.21).

Measurement of long-lived assets (disposal groups)classified as held for sale

Similar to IFRS (ASC 360-10-35-38 through 35-43).


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IFRS U.S. GAAP

A gain is recognized for any subsequent increase in fairvalue less costs to sell of a disposal group (IFRS 5.22):

To the extent that it has not been recognized inaccordance with IFRS 5.19, but

Not in excess of the cumulative impairment loss thathas been recognized, either in accordance withIFRS 5 or previously in accordance with IAS 36, onthe non-current assets that are within the scope ofthe measurement requirements of IFRS 5

An entity does not depreciate (or amortize) a non-currentasset while it is classified as held for sale or while it ispart of a disposal group classified as held for sale.Interest and other expenses attributable to the liabilitiesof a disposal group classified as held for sale continue tobe recognized (IFRS 5.25).

Changes to a plan of sale

For situations where assets or disposal groups

previously classified as held for sale no longer meetthose criteria, the asset or disposal group is no longerclassified as held for sale and disclosure of thecircumstances surrounding the change is required (IFRS5.26-.29 and .42).

After the change, the assets are remeasured at the lowerof their carrying amount prior to the classification as heldfor sale, adjusted for any depreciation, amortization orrevaluations, or their recoverable amount at the date ofthe subsequent decision not to sell, at the amounts thatwould have been recognized had the asset (or disposalgroup) not been classified as held for sale (IFRS 5.27).

If an entity reclassifies an asset or disposal group directlyfrom being held for sale to being held for distribution toowners or vice versa, then the change in classification isconsidered a continuation of the original plan of disposal(IFRS 5.26A and 44L).

Changes to a plan of sale

Similar to IFRS (ASC 360-10-35-44 through 35-45; ASC

360-10-45-7).

Non-current assets to be abandoned

An entity does not classify as held for sale a non-currentasset (disposal group) that is to be abandoned. This isbecause its carrying amount will be recovered principallythrough continuing use. However, if the disposal group tobe abandoned meets the criteria in IFRS 5.32(a)-(c), theentity presents the results and cash flows of the disposalgroup as discontinued operations in accordance withIFRS 5.33-.34 at the date it ceases to be used(IFRS 5.13).

Long-lived assets to be abandoned

Similar to IFRS, except long-lived assets to beabandoned continue to be classified as long-lived assetsto be held and used. Report those long-lived assets asdiscontinued operations if they meet the conditions in

ASC 205-20-45-1A through 45-1C (ASC 360-10-45-15, ASC 360-10-35-47 through 35-48).

Timing considerations

If the held for sale criteria in IFRS 5.7-.8 are met after thereporting period, an entity does not classify a non-currentasset (disposal group) as held for sale in those financial

Similar to IFRS, except for those situations where thecriteria are met after the balance sheet date but beforeissuance of the financial statements, disclosure is


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IFRS U.S. GAAPstatements when issued. However, when those criteriaare met after the reporting period but before theauthorization of the financial statements for issue, theentity discloses the information specified inIFRS 5.41(a), (b), and (d) in the notes (IFRS 5.12).

required of the carrying amounts of the major classes ofassets and liabilities included as part of a disposal groupif not separately presented on the face of the balancesheet (ASC 360-10-45-13 and ASC 205-20-50-1(a)).

Presentation – discontinued operations

The key disclosures required for discontinued operationsare (IFRS 5.33):

A single amount in the statement of comprehensiveincome comprising the total of:

The post-tax profit or loss of discontinuedoperations; and

The post-tax gain or loss recognized on themeasurement to fair value less costs to sell oron the disposal of the assets or disposalgroup(s) constituting the discontinued operation

An analysis of the above single amount (in thestatement of comprehensive income or in the notes)into:

The revenue, expenses, and pre-tax profit orloss of discontinued operations

The related income tax expense as required byIAS 12.81(h)

The gain or loss recognized on themeasurement to fair value less costs to sell oron the disposal of the assets or disposalgroup(s) constituting the discontinued operation

If the analysis is shown in the statement ofcomprehensive income it is presented in a sectionidentified as relating to discontinued operations.

Net cash flows attributable to the operating,investing, and financing activities of discontinuedoperations. These disclosures may be presentedeither in the notes or in the financial statements.

The amount of income from continuing operationsand from discontinued operations attributable toowners of the parent, presented either in the notesor in the statement of comprehensive income.

If an entity presents items of profit or loss in a separatestatement, a section identified as relating to discontinuedoperations is presented in that statement (IFRS 5.33A).

The following is reported (net of income taxes (benefit))separately on the face of the income statement fordiscontinued operations for current and prior periods inthe period a discontinued operation has been disposedof or classified as held for sale (ASC 205-20-45-3 and45-3A):

Results of operations of the component

Gain or loss recognized in accordance with ASC 205-20-45-3C

A gain or loss on disposal or a loss recognized onclassification as held for sale, is presented separately on

the face of the income statement where net income isreported or disclosed in the notes (ASC 205-20-45-3B).

Adjustments to amounts previously reported indiscontinued operations (See ASC 205-20-45-5 forexamples) in a prior period are presented separately indiscontinued operations in the current period (ASC 205-20-45-4).

Similar to IFRS, an entity discloses either in the notes oron the face of the consolidated income statement,amounts attributable to the parent for the following, ifreported in the consolidated financial statements(ASC 810-10-50-1A(b)):

Income from continuing operations

Discontinued operations

Unlike IFRS, the separate disclosure of cash flowsrelated to discontinued operations is not required to bepresented. However, if an entity chooses to separatelyreport cash flows from discontinued operations, then itdoes not aggregate operating, investing, and financingcash flows from discontinued operations into a single lineitem but displays them separately (ASC 230-10-45-24).

Certain disclosure exemptions apply for disposal groupsthat are newly acquired subsidiaries that meet the criteriato be classified as held for sale on acquisition(IFRS 5.39).

Unlike IFRS, there is no similar requirement for adisclosure exemption for a disposal group that is a newlyacquired subsidiary.


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IFRS U.S. GAAP

For prior periods presented in the financial statements anentity re-presents the statement of comprehensiveincome and cash flow disclosures that are set out inIFRS 5.33 so that the disclosures relate to all operationsthat have been discontinued by the end of the reportingperiod for the latest period presented (IFRS 5.34).

An entity does not reclassify or re-present amountspresented for non-current assets or for the assets andliabilities of disposal groups classified as held for sale inthe statements of financial position for prior periods toreflect the classification in the statement of financialposition for the latest period presented (IFRS 5.40).

Similar to IFRS (ASC 205-20-45-3 and 45-4).

Presentation − held for sale assets or disposal group

Where a non-current asset or a disposal group qualifiesas held for sale, the assets and liabilities are presentedseparately from other assets and liabilities (both asseparate single lines). The assets and liabilities are not

offset in the statement of financial position (IFRS 5.38).The major classes of assets and liabilities classified asheld for sale are separately disclosed either in thestatement of financial position or in the notes (exceptwhere the disposal group is a newly acquired subsidiarythat meets the criteria to be classified as held for sale onacquisition). An entity presents separately anycumulative income or expense recognized in OCIrelating to a non-current asset (disposal group) classifiedas held for sale (IFRS 5.38-.39).

Similar to IFRS (ASC 205-20-45-1D, 45-10 and 45-11).

Additional disclosures are required related to a long-livedasset or disposal group which includes an individuallysignificant component of an entity that either has beendisposed of or is classified as held for sale but does notqualify for presentation and disclosure as a discontinuedoperation (ASC 360-10-45-14 and 50-3A).


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3. Accounting policies – general3.1 Accounting policies

IFRS U.S. GAAP

Relevant guidance : IAS 1, 8, and 10 Relevant guidance : ASC 105, 235, and 275; SECRegulation S-K, Item 303

Disclosure of accounting policies

An entity discloses both of the following in the summaryof significant accounting policies (IAS 1.117):

The measurement basis (or bases) used inpreparing the financial statements

The other accounting policies used that are relevantto an understanding of the financial statements

Similar to IFRS, a description of all significant accountingpolicies is included as an integral part of the financialstatements when those financial statements purport topresent fairly financial position, cash flows, and results ofoperations (ASC 235-10-50-1). These disclosuresidentify and describe the accounting principles followedby the entity and the methods of applying thoseprinciples that materially affect the determination of

financial position, cash flows, or results of operations(ASC 235-10-50-3).

An entity whose financial statements comply with IFRSmakes an explicit and unreserved statement of suchcompliance in the notes. Financial statements are notdescribed as complying with IFRS unless they complywith all the requirements of IFRS (IAS 1.16).


An entity discloses, in the summary of significantaccounting policies or other notes, the judgments, apartfrom those involving estimations that management hasmade in the process of applying the entity’s accountingpolicies and that have the most significant effect onamounts recognized in the financial statements(IAS 1.122).

An entity discloses that the preparation of financialstatements requires the use of management’s estimates(ASC 275-10-50-4). Other ASC Topics require entities todisclose information regarding estimates used indetermining the carrying amounts of assets and liabilitiesor in disclosure of gain or loss contingencies (ASC 275-10-50-7).

SEC registrants disclose critical accounting policies inmanagement’s discussion and analysis of financialcondition and results of operations; however, thatinformation is outside of the financial statements. Thereis no similar requirement for non-SEC reporting entities(SEC Regulation S-K, Item 303).

An entity discloses information about the assumptions itmakes about the future, and other major sources ofestimation uncertainty at the end of the reporting period,that have a significant risk of resulting in a materialadjustment to the carrying amounts of assets andliabilities within the next financial year. The notes includedetails of the nature and carrying amount as at the endof the reporting period of those assets and liabilities(IAS 1.125).

An entity discloses information about a material changein the amount of an estimate if it is at least reasonablypossible (more than remote but less than likely) that achange in the estimate will occur in the near term(ASC 275-10-50-8 through 50-9).

An entity discloses information that will enable users ofits financial statements to evaluate the entity’s



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IFRS U.S. GAAPobjectives, policies, and processes for managing capital(IAS 1.134).

Selection and application of accounting policies

When an IFRS specifically applies to a transaction, otherevent, or condition, the accounting policy or policies

applied to that item is determined by applying the IFRS(IAS 8.7).

In a situation in which no specific IFRS applies to atransaction, other event, or condition, management usesits judgment in developing and applying an accountingpolicy that results in information that is both (IAS 8.10):

Relevant to the economic deci

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