Not sure if this is there in the Schweser books, wonder if any of you have come across this topic? Do US GAAP and IAS GAAP differ with respect to the treatment of non-recurring items and the treatment of discontinued operations, respectively? Non-Rec Items Discontinued Ops A. No No B. No Yes C. Yes No D. Yes Yes
D, yes yes
If you are unsure I would guess that they differ. IAS is always almost more flexible than US GAAP.
It was just shocking as there is a seperate section on IAS rules in the CFA (2006) books, but nothing mentioned in the Schweser 2007 books…but will keep the “flexible” aspect in mind…thanks mwvt9! And yes, the answer is D, obviously…
in the 2007 books from CFAI – the IAS vs. US GAAP is only referred to in the CFO/CFI/CFF impacts. not for non-recurring and/or lease related stuff. I believe those were there in the 2006 exam. which is Item************US GAAP******IAS GAAP Interest Recd******CFO*********CFO or CFI Dividend Recd******CFO*********CFO or CFI Dividend Paid******CFF*********CFO or CFF Interest paid ***** CFO*********CFO or CFF
cpk123, CFAI books also talk about different treatment of impairments. According to US GAAP if an asset market value is below its book value, it can be impaired but the book value can’t go up if the market value is above the BV. However, IAS GAAP allows that.
There is a really nice table on pg 182 (Exhibit 37-7) in '07 CFAI FSA book that lists the differences between IAS & US GAAP. Schweser has done a piss poor job of presenting this section. Some of the differences are scattered in Schweser like the ones CPK mentioned ^. But some are not mentioned (I think) like * LIFO is not allowed in IAS * LCM of inventory is at NRV only (US GAAP = range between NRV —NRV-profit margin) * Inventory once written down can be written up in IAS not in GAAP. * Presentation of extraordinary items are not allowed in IAS * Definition of discontinued operations is very narrow in IAS as the operation would have to be a seperate business or geographic area. * There is no concept of valuation reserve in IAS, DTA is only recognized, if realization is probable. * Capitalization of interest on qualifying assets is required in GAAP but is optinal in IAS.
that’s a cool summary, delhirocks!
Thanks a ton…will write it down in my FSA book…