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Dr. Epstein served as the lead author of 14 annual editions of Wiley IFRS (1997 through 2010), and 26 annual editions of Wiley GAAP (1985 through 2010), all published by John Wiley & Sons.
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Accounting for Investments (Equity Method and Other)
IFRS versus GAAP
Listed below are some of the major differences between International Financial Reporting Standards (IFRS) and U.S. GAAP in accounting for investments (equity method and other). This material is excerpted from Wiley IFRS 2010: Interpretation and Application of International Financial Reporting Standards.
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U.S. GAAP Investments (Equity Method & Other) |
IFRS Investments (Equity Method & Other) |
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Use of equity method based on significant influence being wielded by investor
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Same as under U.S. GAAP (equity method investees referred to as associates under IFRS) |
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Extensive disclosures required of investees statement of financial position and income statement data |
Extensive disclosures required of associates balance sheet and income statement data
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Joint ventures generally accounted for by equity method, but some industries (e.g., construction) use proportional consolidation is traditional
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Joint ventures accounted for by equity method or proportionate consolidation, but IASB will soon ban proportionate consolidation and conform with U.S. GAAP treatment |
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No need to conform investor and investee accounting policies
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Need to conform investor and investee accounting policies |
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Investment property must be accounted for by cost (and depreciation) method
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Investment property can be accounted for by cost (and depreciation) method, or by fair value method with changes reported in income |
Contact IFRS international accounting expert Dr. Barry Epstein, CPA for more information. Learn more about Dr. Epstein at www.ifrsaccountant.com. He can be reached at BEpstein@SSandG.com or 312-464-3520.
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