Just going through FRA 2nd read-through. I was wondering if anyone had any tips for remembering all the differences between USGAAP and IFRS?
I downloaded the following which is quite helpful in summarizing ALL the differences but it’s still way more information than I think I’ll ever be able to retain for the exam (in addition to all the other stuff we already have to remember).
I’m going to try to remember as many as possible, but I think realistically I’m hoping I can narrow them down to a “top 15” list of some sort, and just remember that, and hope for the best on the rest.
Questions for the veterans as well as the newbies:
Am I being crazy thinking I’m going to get away with this?
Regardless of answer to above, would agree that certain IFRS/USGAAP difference are more important to remember? For example, that USGAAP allows both FIFO/LIFO whereas IFRS only allows FIFO seems to be one that is emphasized more than others. If I’m going to remember any rules, this should be one of them. What other rules do you guys think are heavily emphasizes and more likely to be tested on.
Have you guys noticed any patterns of any kind in the rules (i.e. USGAAP is more leniant, IFRS doesn’t allow lots of things, etc.), something to allow one to make an educated guess if in doubt.
Sometimes the best way to remember this sort of material is to create associations for yourself. For example, in the LIFO/FIFO example above, LIFO is better for taxes in an inflationary environment, so the way I remember that USGAAP allows it and IFRS doesn’t is that I think “Americans like to dodgy up their taxes so they pick whatever inventory method suites them best”. It’s stupid, I know, but I remember it this way. Anybody else out there care to share the embarrassing associations they’ve created to memorize stuff? Come on, let’s hear them.
Better re-read them multiple times and try writing them once you memorize some part. Making a sketch in mind could be useful but better to memorize this stuff through mnemonics.
Yea, keep looking at it over and over. It’s really not that hard to remember if you drill it into your head. Also, if you can, get a hold of the Schweser books/slides and in study session 10 FRA: Applications and Int’l Standard Convergence (This was from the 2011 book) they have all the differences and similarities listed. You’re going to need all of it. Good luck!
When I took L1 the percent of completion / etc… for expense recognition was a big deal, and also how IFRS lets more things be capitalized (R&D was a big one that was different in GAAP vs IFRS - those plus the LIFO/FIFO stuff were definitely tested and were the key components in 2010).
Create a word document with all the differences u find. I did that n absolutely murdered that exam in December. It helps u to keep track of where they are, bc a lot of the differences are spread out
I had created a comparison chart and it was very much helpful in cramming the stuff. Finquiz guys made one too which i found later :S. You can either make your own but why spend the time when its already been made. Go on cram that one it would help!
Do you have the word document with the listed differences between IFRS and GAAP? If you do, it would be very kind of you to pass it along for reference.
Also, if anyone else has the listed differences, it would be a good ida to share it.
I hate this IFRS GAAP stuff. Never liked accounting to begin with. So far the only difference I remember properly is that Gaap allows no upward revaluations and the no lifo under IFRS.
In level 1 this is one of those unfortunate stuffs where there could be too much emphasis as well. So you got to nail it down, no two ways about it…
There are three key things to do this:
Make an excel sheet - Have numbers and a sample of how calculation is different for GAAP and IFRS (this calclation sample is needed for only complex stuffs).
Read this excel sheet once in 3-4 days (say 15 minutes everytime you read).
Do as many problems as you can?
Surprise, in 10-12 weeks you have mastered that Believe me, I was a non Accounts guy and did the above stuff and got a 70+… If I can, you can too; and if you can then you should!..
