Download Key Differences Between IFRS and US GAAP

Convergence*
Are you ready?
June 2008
*connectedthinking
PwC
Discussion Topics
IFRS Overview
Convergence ‘defined’
Practical applications for CPAs
How to get ready
Appendixes:
• What the SEC is doing
• IASB and FASB Convergence
• Differences between IFRS & US GAAP
• Educational Resources
June 2008
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IFRS Developments – What’s the big deal
The Momentum Towards Global IFRS Adoption
More than 100 countries require or permit the use of International Financial Reporting Standards
(IFRSs), or are converging with the IASB’s standards.
Top 10 Global Capital
Markets
US
US GAAP
Japan
Converting to IFRS
UK
IFRS
France
IFRS
Canada
Converting to IFRS
Germany
IFRS
Hong Kong
IFRS
Spain
IFRS
Switzerland
IFRS or US GAAP
Australia
IFRS
Countries that require or permit IFRSs
Countries seeking convergence with the IASB on pursuing adoption of IFRSs
June 2008
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What the Regulators are saying
“In 2008, the Division of Corporation Finance and the Office of
the Chief Accountant, led by Wayne Carnall and Julie Erhardt,
will formally propose to the Commission an updated "roadmap"
that lays out a schedule, and appropriate milestones on which
the schedule will be conditioned, for continuing the progress that
the United States is making in moving to accept IFRS in this
country.”
Christopher Cox, Chairman of the U.S. Securities and Exchange Commission
February 8, 2008
Remarks to the 'SEC Speaks in 2008' Program of the Practising Law Institute
June 2008
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IFRS 1 – First Time Adoption of IFRS
• Application of IFRS 1 is a critical issue for companies making the
transition to IFRS.
• IFRS 1 requires an entity in its opening IFRS balance sheet to:
- Recognize all assets and liabilities required by IFRS
- Not recognize assets and liabilities not permitted by IFRS
- Classify all assets, liabilities and equity as required by IFRS;
and
- Measure all items in accordance with IFRS
EXCEPT where an exemption or exception allows or
requires otherwise
June 2008
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IFRS 1 – First Time Adoption of IFRS
• Accounting policies based on current version of IFRS at the
reporting date
• Retrospective application to opening IFRS balance sheet and
all periods, subject to
• 14 optional exemptions; and
• 5 mandatory exceptions
• Earlier versions of the same IFRS are not used
• Transition guidance in IFRS not used by first time adopters
unless specifically directed
June 2008
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Key IFRS – US GAAP Differences
Framework
Fundamentally, the frameworks and concepts underlying both IFRS and US
GAAP are similar
Principles vs. Rules
IFRS built under principles based methodology; approximately 2,500 pages
US GAAP is more prescriptive and rules-based addressing specific industries
and types of transactions in many areas; approximately 25,000 pages
Fair value accounting
Greater use of fair value under IFRS than US GAAP (e.g., greater use of
discounting, requirement to bifurcate compound instruments, option to revalue
property, plant & equipment, investment property and intangibles)
June 2008
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Key Differences Between IFRS and US GAAP
• Consolidation
• Revenue recognition
(e.g., VSOE, percentage
of completion)
• R&D capitalization
• Impairments
• Securitizations/asset
derecognition
• Debt/equity classification
• Hedging qualification
• Employee stock
compensation
• LIFO
• Tax consequences of these
differences
• Income tax accounting
• Provisions
June 2008
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How many IFRS filers in 2007?
Market Considerations
• Additional flexibility in capital raising initiatives
• Cross border acquisition and divesture activities may require
IFRS knowledge
• Increased investor interest; effective market communications
• Benchmarking with peers
• Take steps to influence regulators and tax authorities around
the impact and acceptance of IFRS
• Being seen as a front runner in the adoption of IFRS in the US
• Certain US companies are starting now; do you want to be
behind the curve?
June 2008
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How do you define convergence?
IFRS GAAP
convergence
US GAAP
Local Territory Statutory GAAP
Local Territory Statistical
Local Territory Tax Federal
Convergence
Local Territory Tax State & Local
Local Territory Performance
Others?
June 2008
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Dutch Taxonomy Project –
http://www.xbrl-ntp.nl/english
“The Dutch government intends to
reduce the administrative burden of
businesses 25 percent”
June 2008
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Australian SBR
“The benefits to business are
ultimately estimated rise to $795M per
year on an ongoing basis”
June 2008
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The Adoption of XBRL is a Reality
A sampling of projects:
Country
Organization
Program/Application
Japan
Tokyo Stock Exchange
(TSE), NTO, BoJ
TSE Registrant Financial
Report Filings
United States
Securities Exchange
Commission
XBRL Voluntary Filer Program
FFIEC/FDIC/FRS/OCC
Companies House
Call Report Modernization
Accounts Filings
UK
China
HM Revenue and Customs Company Tax Filings
China Securities
Interactive Data Filing for
Regulatory Commission
Financial Statements
Australia
Financial Supervisory
Service/DART
Australian Treasurer
Netherlands
Min of Finance/Justice
Singapore
ACRA
Korea
Mandatory Filing for all
registrants
Standard business reporting
program – Business Centric
Model
Mandatory Filing for all
registrants
June 2008
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June 2008
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IFRS XBRL Taxonomy
Currently available at http://www.iasb.org/xbrl
Supports a range of languages:
• Arabic
• Dutch
• English
• French
• German
• Hungarian
• Italian
• Portuguese
• Spanish
being prepared: Polish, Hebrew, Chinese, etc.
June 2008
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What is XBRL?
International Supply Chain Standardization effort
Relevant to internal and external business information
Mandated by economics as it enables significant benefits
Mandated by regulators (including SEC)
Replaces manual process steps with automation
Applicable to business information, related business rules,
formulas, controls, processes, resources, etc.
http://www.xbrl.org and http://xbrl.us
‘Bar Code’ for business information
June 2008
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Here is the problem – a simple Income
Statement
I will give $50 to anyone who can tell me the following:
The name of the company
The period of the report
The currency used
The accounting principles used
If the accounts are audited or not
The exchange on which the company is traded
June 2008
PricewaterhouseCoopers
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How long does it take for you to……..
Aggregate note disclosure information from subsidiaries?
Validate the math within company financial statements?
Find the disclosures related to specific concepts in F/S?
Identify relevant FASB standards and Reg SX regulations?
Compare performance with others?
Share analytical formulas/models with others?
Obtain data from a wide range of disparate ERP systems?
Validate and analyze data?
If your answer is more than a few seconds, then XBRL can help
June 2008
PricewaterhouseCoopers
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Recent Headlines & White Papers
Motley Fool – The most important shareholder initiative in a
decade (March 24th)
Gartner - XBRL Will Enhance Corporate Disclosure and
Corporate Performance Management (April 23rd)
MSN Money – A Revolution for the small investor (April 30th)
Treasury & Risk Magazine – Time to Speak the Same Language
(April)
FEI Magazine – XBRL: Not Just for External Reporting (May)
SEC Proposed Rule to Mandate XBRL (May 30th)
June 2008
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The business reporting supply chain
Transaction
Layer
Processes
Business
Operations
XBRL Global XBRL External Reporting
Ledger
Internal
Busine
ss
Reporti
ng
External
Busines
s
Reportin
g
SCOA
Payables Ledger
Receivables Ledger
Fixed Asset Ledger
Others
Investme
nt,
Lending,
Regulatio
n
Economic
Policymak
ing
US GAAP
IFRS
GRI G3
Statutory
MD&A
June 2008
PricewaterhouseCoopers
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XBRL is More Than Just Tagging Business
Information
•
Multi-dimensional
business and financial
data representations
Definitions
Related to Liquid Assets
Presentation
References
Cash & Cash Equivalents
•
•
Flexibility of business
reporting vocabularies
(i.e. taxonomies)
Mathematical
relationships between
concepts
GAAP I.2.(a)
CoA 1100
Label
Cash in Bank
XBRL
<cash>
“200”
Calculations
Formulas
Cash = Currency + Deposits
Cash ≥ 0
Contexts
•
Flexibility about how
to present information
to users
US $X
FY2009
Budgeted
June 2008
PricewaterhouseCoopers
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What does XBRL Look Like?
What does XBRL look like? What does CALCPA.org look like?
Example here
• Example here
How does it make your life better?
• Example here – how to find disclosures
• Example here – how to consolidate/aggregate info
• Example here – how to access data?
• Example here – how to map XBRL GL to your ERP
• Case Study here – how to enhance process agility
• Case Study here – how to enhance data quality &
analysis
June 2008
PricewaterhouseCoopers
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XBRL US GAAP Taxonomy
Explicit References
What is the FASB Standard for the current deferred tax assets?
PricewaterhouseCoopers
US GAAP Taxonomies are available here
June 2008
23
SEC Proposed Rule to Mandate XBRL
How – via a new exhibit supplemental to financial
statements
What - The financial statement footnotes (as block text) and
financial statement schedules in first year. After the first
year, filer would be required to tag the detailed disclosures
within the footnotes and schedules. This would apply to
annual and quarterly reports, as well as registration
statements containing financial statements for such fiscal
periods.
See http://www.sec.gov for details
Comments due on August 1, 2008
June 2008
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SEC Proposed Rule to Mandate XBRL
When - beginning with fiscal periods ending on or after
December 15, 2008.
•
•
•
•
In year 1, the proposed rules would apply only to domestic and foreign
large accelerated filers that use U.S. GAAP and have a worldwide public
float above $5 billion, approximately 500 companies.
In year 2, all other domestic and foreign large accelerated filers using U.S.
GAAP.
In year 3, all remaining filers using U.S. GAAP, including smaller reporting
companies, and all foreign private issuers that prepare their financial
statements in accordance with IFRS as issued by the IASB
A 30 day grace period would be permitted for the first interactive data
exhibit of each filer
June 2008
PricewaterhouseCoopers
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What do companies need?
Software – embedded in your existing tools here and here
Taxonomies – basic reporting concepts
•
•
•
•
US GAAP XBRL Taxonomies
IFRS GAAP Taxonomies
Proxy Taxonomy
Others
Understanding/Awareness – what is new
•
•
Processes
Case Studies
They do not need to understand the XBRL technology
June 2008
PricewaterhouseCoopers
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Forms of XBRL Adoption
• Outsourcing – via automated tagging and SAAS workflow
offerings (http://www.tryxbrl.com as an example)
• High level – Bolt-on
- XBRL can be quickly adopted by companies at the “highest”
reporting level (i.e. consolidated) solely for purposes of
complying with regulatory requirements. However, its benefits
for business reporting process enhancements are not fully
realized.
• Embedded - XBRL & XBRL Global Ledger
- XBRL Global Ledger implementation requires more time and
better planning.
- Requires companies to assess information needs and provides
an opportunity to eliminate inefficiencies in current reporting
practices.
- Maximizes benefits of XBRL to preparers and internal and
external users of financial and non-financial information.
June 2008
PricewaterhouseCoopers
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Typical Reporting Process – Bolt-on XBRL to prepared report
Supplemental Data
ERP
ERP
10-Q in
Word
10-Q in
Word
HFM
ERP
Review
and Check
Review
and Check
10-Q in
Word
Edgar
June 2008
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Streamlined Reporting Process – Embedded in Report Writer
Wacoal
Fujitsu
ERP
ERP
HFM
XBRL Tagged
10-Q in
XBRL
ERP
Supplemental Data
Edgar
XBRL Tagged
June 2008
PricewaterhouseCoopers
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Practical applications for CPAs
An Internet standard for business information
Accessing data from disparate ledgers, sub-ledgers, transaction ledgers
- information useful in tax returns, elimination entries, M-3 reconciliations,
internal audits, performance reports, budgets, projections, etc.
Analyzing data across a wide range of software applications
- any type of analytics, benchmarking, budgeting & planning, control
design, process design, validation rules, etc.
Reporting
- report generation, visualization, management reports, BI dashboards,
Business Performance Management
Knowledge Sharing
- GAAP, GAAS, Tax, Company Policies, SME’s, Training, etc.
- Analytics, benchmarking data, controls, business rules, etc.
June 2008
PricewaterhouseCoopers
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What is at stake?
June 2008
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How to get your members ready
What you can do
Get the message out – get ready for convergence
Make members aware of short term implications/opportunities
Provide training on IFRS & XBRL implications
Relate to the individual CPA working practices
Increase knowledge of relevant projects, taxonomies, and tools
Organize members to engage in market collaboration efforts:
IFRS and US GAAP Taxonomy Project efforts
Industry, Performance, Sustainability efforts
Expose members to tool training/enhancements
June 2008
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Convergence*
Are you ready?
Any Questions??
*connectedthinking
PwC
What the SEC is doing
June 2008
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34
What the SEC is doing
Chairman Christopher Cox of the SEC
“I'd like to invite every public company, [especially] those companies not yet
involved in our voluntary filing program, to consider whether they should
obtain a copy of this new GAAP set of data tags ... and its supporting
documentation and consider using it alongside your current process as you
prepare your calendar 2007 filings or your filings for the fourth quarter of
2007.”
Will XBRL be mandated?
“This is the recommendation that we will be seeking from all of the offices
within the Spring of next year.”
From the “Major Announcement About
Interactive Data in Financial Reporting,
Tuesday, September 25, 2007”
June 2008
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What the SEC is doing
Proposed Rule to mandate XBRL
May 30th, 2008
Please See http://www.sec.gov/rules/proposed/2008/33-8924.pdf
for issuance of proposed rule to mandate XBRL for public
registrants
June 2008
PricewaterhouseCoopers
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What the SEC is doing
SEC Proposed Rule to Mandate XBRL – How/What
How – via a new exhibit supplemental to financial statements
What - The financial statement footnotes (as block text) and financial
statement schedules in first year. After the first year, filer would be
required to tag the detailed disclosures within the footnotes and
schedules. This would apply to annual and quarterly reports, as well as
registration statements containing financial statements for such fiscal
periods.
60 day public comment period.
June 2008
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What the SEC is doing
SEC Proposed Rule to Mandate XBRL – When
When - beginning with fiscal periods ending on or after December 15,
2008.
• In year 1, the proposed rules would apply only to domestic and
foreign large accelerated filers that use U.S. GAAP and have a
worldwide public float above $5 billion, approximately 500 companies.
• In year 2, all other domestic and foreign large accelerated filers using
U.S. GAAP.
• In year 3, all remaining filers using U.S. GAAP, including smaller
reporting companies, and all foreign private issuers that prepare their
financial statements in accordance with IFRS as issued by the IASB.
June 2008
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What the SEC is doing
SEC Proposed Rule to Mandate XBRL – Submission
Format
Interactive data would be required with a company's annual
and quarterly reports, transition reports, and Securities Act
registration statements
Interactive data would also be required to be posted on the
company’s corporate web site, if it maintains one
June 2008
PricewaterhouseCoopers
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What the SEC is doing
SEC Proposed Rule to Mandate XBRL – Submission
Timing
Interactive data would be required to be provided to the
Commission, and posted on company websites, at the same
time as the related report or registration statement, with two
exceptions.
• A 30 day grace period would be permitted for the first
interactive data exhibit of each filer,
• A 30 day grace period would be permitted for the first
interactive data exhibit that is required to include the
footnotes and schedules tagged in detail.
June 2008
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What the SEC is doing
SEC Proposed Rule to Mandate XBRL – Liability and
Non-Compliance
Filers that do not provide or post required interactive data on
the date required would be deemed not current with their
Exchange Act reports.
Data in the interactive data file submitted to us would be
subject to liability similar to that of the voluntary program and,
as a result, would be subject to only limited liability.
June 2008
PricewaterhouseCoopers
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What the SEC is doing
What do companies need?
Software – embedded in your existing tools here and here
Taxonomies – basic reporting concepts
•
•
•
•
US GAAP XBRL Taxonomies
IFRS GAAP Taxonomies
Proxy Taxonomy
Others
Understanding/Awareness – what is new
•
•
Processes
Case Studies
You do not need to understand the XBRL technologyJune 2008
PricewaterhouseCoopers
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What the SEC is doing
Data Standard vs Data Standardization
• XBRL Taxonomies DO NOT create a standard reporting
template
• XBRL Taxonomies
- Common disclosure concepts
- Represent a wide range of disclosure concepts
• Statutory, financial, tax, statistical, non-financial, etc.
- Extensible to represent unique company specific
concepts
- Both public and private concepts
- More than just defining concepts
June 2008
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What the SEC is doing
Forms of XBRL Adoption
• Outsourcing – via automated tagging and SAAS workflow
offerings (http://www.tryxbrl.com as an example)
• High level – Bolt-on
- XBRL can be quickly adopted by companies at the “highest”
reporting level (i.e. consolidated) solely for purposes of
complying with regulatory requirements. However, its benefits
for business reporting process enhancements are not fully
realized.
• Embedded - XBRL & XBRL Global Ledger
- XBRL Global Ledger implementation requires more time and
better planning.
- Requires companies to assess information needs and provides
an opportunity to eliminate inefficiencies in current reporting
practices.
- Maximizes benefits of XBRL to preparers and internal and
external users of financial and non-financial information.
June 2008
PricewaterhouseCoopers
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What the SEC is doing
What You Can Do Now
• Use available resources to get smart on XBRL (see appendix for
resources)
• Develop plan for assessment/implementation
• Consider Relevant Taxonomies
- Financial
• US GAAP
• IFRS
- Non-Financial
• Proxy
• Enhanced Business Reporting Consortium
• Global Reporting Initiative
June 2008
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What the SEC is doing
SEC - Other XBRL Related Activities
$49m EDGAR Modernization project (XBRL Compliant)
$5.5m US GAAP XBRL Taxonomy Enhancement Project available for review here:
http://usgaap.xbrl.us
XBRL viewer released on December 5th 2006 http://www.sec.gov/spotlight/xbrl.htm
Executive Compensation tool released on December 5th 2007
http://www.sec.gov/news/press/2007/2007-268.htm
New SEC Office of Interactive Disclosure created
Advisory Committee on Improvements to Financial Reporting includes Delivering
Financial Information Subcommittee
Executive compensation XBRL project launched in December 2007
Proxy XBRL Taxonomy also available for review:
https://myservice.broadridge.com/XBRL
‘Round Table’ discussions (June 06, Oct 06, March 07)
SEC XBRL Spotlight site http://www.sec.gov/spotlight/xbrl.htm
XBRL US GAAP Taxonomies and Supporting Documentation
http://www.xbrl.us/Pages/US-GAAP.aspx
June 2008
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IASB and FASB Convergence
June 2008
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IASB and FASB Convergence
Convergence of IFRS and US GAAP
• Overall vision and objective
• Short-term convergence
• Long-term convergence
June 2008
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IASB and FASB Convergence
Overall Vision and Objective
• Objective is to create one global set of high-quality
standards
• Convergence goes beyond US GAAP and IFRS
• “Convergence means change. We must not have
convergence for the sake of it”—Bob Herz—
Chairman FASB
• Convergence is a two-way street
June 2008
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IASB and FASB Convergence
FASB and IASB Memorandum of Understanding
(February 2006)
Roadmap for convergence between IFRS and US GAAP
between 2006—2008
General guidelines are as follows
• Convergence is best achieved through the development
of high quality standards over time
• Differences between standards in need of improvement
should not be eliminated; new standards should be
developed instead
• Weaker standards should be replaced with stronger
standards
June 2008
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IASB and FASB Convergence
Convergence—Accounting standard setters
FASB and IASB
Overall strategy
• Short-term convergence project
- High-quality solution achievable in the short-term
Coordination of work programs—joint projects
• Business combinations
• Revenue recognition
• Conceptual framework
• Consolidation
• Fair value measurements
June 2008
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Differences between IFRS & US GAAP
Key Differences Between IFRS and US GAAP
• Consolidation
• Revenue recognition
(e.g., VSOE, percentage
of completion)
• R&D capitalization
• Impairments
• Securitizations/asset
derecognition
• Debt/equity classification
• Hedging qualification
• Employee stock
compensation
• LIFO
• Tax consequences of these
differences
• Income tax accounting
• Provisions
June 2008
PricewaterhouseCoopers
53
Key IFRS – US GAAP differences
Financial instruments
IFRS
US GAAP
Preferred equity
securities
Depending on the terms, instrument has to be
bifurcated between financial liability and equity.
Temporary equity (or mezzanine equity) classification is allowed
without bifurcation of financial liability component.
Convertible debt
Split accounting is compulsory
No split accounting unless beneficial conversion feature
Interest expense is accreted using effective interest
rate method which is based on market interest rate for
a similar bond without conversion features.
Interest is accounted for at nominal interest rate
Securitization /
Derecognition of
financial assets
A control test is performed to see whether securitization
vehicle needs to be consolidated.
Derecognition is based primarily on transfer of control.
Derecognition is based primarily on evaluation of
transfer of risks and rewards and secondly on transfer
of control.
legal isolation of the transferred asset
A transfer of risks and rewards can occur in one of two
ways:
The derecognition model is governed by three key tests:
ability of transferee to pledge or sell the asset
no right or obligation to repurchase
Transfer of contractual rights.
Pass-through arrangement.
Once derecognition is confirmed, entity is required to
analyze whether full or partial derecognition has
occurred.
Hedging
Generally similar principles, however, numerous differences in detailed application. IFRS offers more flexibility in terms of
hedge design, however, fewer scope exemptions, stricter documentation requirements and effectiveness assessment
criteria.
June 2008
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Key IFRS – US GAAP differences
Impairment of long-lived assets
Impairment of PP&E,
cash-generating
units and finite-lived
intangible assets
IFRS
US GAAP
If impairment is indicated, a one step approach is used
to determine the impairment based on discounted cash
flows. Assets are written down to recoverable amount
which is higher of:
A two-step impairment test approach is used to determine
impairment:
fair value less costs to sell or
value in use based on discounted cash flows.
Step 1: Compare carrying amount with undiscounted cash
flows expected from the asset.
Step 2: If carrying amount is higher, the impairment loss is
measured as the difference between the carrying amount and
fair value.
Reversal of
impairment losses
An impairment loss relating to an intangible asset other
than goodwill may be reversed if certain criteria are met.
Reversal of impairment losses is not permitted under US GAAP.
Impairment of
goodwill
Goodwill is assigned to one
or more cash-generating units (cannot be higher than
an operating segment). One step approach (comparison
between recoverable amount and carrying amount).
Goodwill is assigned to an entity’s reporting unit (i.e., an
operating segment) or one level below (i.e., a component). Twostep approach. 1 - Fair value vs. carrying value
of reporting unit; 2- implied FV of GW vs. carrying amount of
goodwill
June 2008
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Key IFRS – US GAAP differences
Intangible assets - Development costs
IFRS
US GAAP
General guidance
Development costs must Development costs are expensed
be capitalized
if certain criteria
are met
Internal use software
Same general guidance
Costs incurred during the preliminary project stage
are expensed. Costs relating to the application
development stage are capitalized. Training costs
are expensed.
Software to be sold or
otherwise marketed
Same general guidance
Costs incurred to establish the technological
feasibility of computer software are expensed when
incurred
June 2008
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Key IFRS – US GAAP differences
Stock-based compensation
IFRS
US GAAP
Grant date
The date when the entity and another party (including
employees) agree to the arrangement. If arrangement
is subject to approval, grant date is when approval is
obtained
Date an employee begins to benefit from, or adversely affected by,
subsequent changes in the price of the employer’s equity shares
Graded-vesting
options
Each installment of a graded vesting award is treated as a
separate share option grant
Provides an accounting policy choice for awards with graded vesting
schedule and only service conditions to be recognized either on a
straight line basis or treat each installment separately
Other recognition
criteria
Fair value of the award recognized over the period to which
employees’ service relate
Fair value of the award is recognized over the requisite service period
Social charges and
payroll taxes
Payroll taxes and social charges are recorded in each period
as the related compensation expense associated with a
share-based payment transaction is recognized in the income
statement
Payroll taxes and social charges on employee stock based
compensation are recognized on the date of the event triggering the
measurement and payment of the tax to the taxing authority (generally
the exercise date)
June 2008
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Key IFRS – US GAAP differences
Provisions
Probable vs. more
likely than not
IFRS
US GAAP
Under IFRS, the recognition criteria for provisions is
more likely than not which is considered as a probability
of greater than 50%
Higher recognition threshold under US GAAP for provisions,
generally 75% or over.
Recognize when virtually certain, not to exceed amount
of provision
Recognize when probable (>75%)
Reimbursements
Discounting
Range of estimates
A provision is discounted based on estimated cash
flows using a pre-tax rate reflecting the risks specific to
the liability.
US GAAP requires discounting only if there are fixed cash flows
and uses a credit-adjusted, risk-free rate.
The adjustment of provisions due to the passage of
time is recorded as interest expense, not operating
expense.
The accretion of interest is recorded as operating expense.
If a range of estimates is present in measuring a
provision, IFRS requires use of the mid-point of the
range
In such a case, US GAAP requires use of the lowest point in the
range.
June 2008
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Key IFRS – US GAAP differences
Income tax
Intercompany transfers
of assets remaining in
the group
IFRS
US GAAP
Taxes paid by sellers on profits arising from intercompany
asset transfers are not deferred. Buyer’s tax rate is used to
calculate deferred tax asset in consolidated financial
statements.
Taxes paid by sellers on profits arising from intercompany asset
transfers should be deferred using seller’s tax rate. The buyer is
prohibited from recognizing DTA resulting from the tax basis
adjustments of transferred asset. Par. 9(e) will be eliminated in the
convergence project.
No such exception under IAS 12. Deferred tax asset or
liability is calculated on differences resulting from
remeasurement from local currency to functional currency.
Prohibits recognition of DTA or DTL for differences related to assets
and liabilities that, are remeasured from the local currency into the
functional currency using historical exchange rates and that result from
(i) changes in exchange rates or (ii) indexing for tax purposes. Par.
9(f) will be eliminated in the convergence project.
No specific guidance in IAS12. Should reflect amount
expected to be paid/received. MLTN recognition model is an
acceptable approach.
Two step approach:
(FAS 109 par. 9e)
Foreign non-monetary
Assets and Liabilities
(FAS 109 par. 9f)
Uncertain tax positions
Probability weighted average approach, or single best
estimate/most likely outcome are acceptable measurement
models.
MLTN recognition step
Cumulative probability methodology for measurement step.
Extensive disclosures required.
Limited disclosure requirements.
Deferred tax on share
based payments
Deferred tax is remeasured to intrinsic value of vested
awards each reporting period. Shortfalls are recognized
through PL; windfalls in equity. There is no concept of
offsetting pools.
Changes in the stock price do not impact the deferred tax asset or
result in any adjustments prior to settlement or expiration.
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Educational Resources
Educational Resources
Resources
Securities and Exchange Commission Site:
•
Spotlight on XBRL: http://www.sec.gov/spotlight/xbrl.htm
•
XBRL Submissions: http://www.sec.gov/Archives/edgar/xbrl.html
•
XBRL Interactive Viewing tool: http://www.sec.gov/spotlight/xbrl/xbrlwebapp.htm
•
For specific questions about XBRL and SEC VFP, please contact XBRL US, Inc. at 212-3627630.
XBRL - US Site:
•
http://www.xbrl.us See Webinar Archive under the ‘Events’ tab
•
Case Studies http://www.xbrl.us/Documents/XBRL_all_case_studies.pdf
•
State of the Art Reporting (Four five-minute videos)
•
http://www.smartpros.com/xbrldemos/
XBRL International Web Site:
•
Tools: http://www.xbrl.org/tools
•
Products and Services: http://www.xbrl.org/productsandservices/
•
Discussion Groups: http://www.xbrl.org/GroupsPublic/
•
Project White Papers: http://www.xbrl.org/ProjectDetails/
•
General Education: http://www.xbrl.org/EducationAndTraining/
Others:
•
“XBRL for Dummies”: http://www.xbrlfordummies.com
•
IMA Suggested Reading: http://www.imanet.org/research_technology_reading.asp
•
CFO.com XBRL site http://www.cfo.com/guides/guide.cfm/8310234
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Educational Resources
Suggested Reading
Global Ledger Practices Guide for Study http://www.gl.iphix.net/
ROI on XBRL: http://www.aicpa.org/pubs/jofa/jun2007/stantial.htm
Hitachi Blogs:
• http://blog.hitachixbrl.com/2007/01/16/the-entity-problem/
• http://blog.hitachixbrl.com/2007/01/30/relationships-matter/
• http://blog.hitachixbrl.com/2007/02/13/in-pursuit-of-process/
• http://blog.hitachixbrl.com/2007/01/09/master-data-management-the-xbrl-way/
• http://blog.hitachixbrl.com/2006/12/08/adaptation-or-evolution-what-is-your-xbrl-strategy/
XBRL Ledger white paper: http://www.imanet.org/pdf/8xbrl.pdf
FFIEC White Paper: http://www.xbrl.org/us/us/FFIEC%20White%20Paper%2002Feb2006.pdf
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Educational Resources
Online demonstrations
Microsoft Investor Central
• http://www.microsoft.com/msft/IC/default.aspx
Executive Compensation Widget
• http://www.ibanknet.com/widgets/index.shtml
Edgar-Online IMetrix
• http://www.edgar-online.com
• http://www.edgar-online.com/products/imetrix.aspx
Rivet Software Crossfire
• http://www.rivetsoftware.com/content/index.cfm?fuseaction=showContent&conte
ntID=195&navID=166
• http://www.rivetsoftware.com/resources/files/CrossfireLaunch/CrossfireAnalystR
eportCreation.htm
Google OneBox
• http://www.iphix.net/resources/nunavut.htm
June 2008
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Educational Resources
An Article to Read
“Speeding toward Convergence: Changes to Come Rapidly
for Accounting Profession”
Allison M Henry
Pennsylvania CPA Journal
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Typical Reporting Process – Bolt-on XBRL to prepared
report
Supplemental Data
ERP
ERP
10-Q in
Word
10-Q in
Word
HFM
ERP
Review
and Check
Review
and Check
10-Q in
Word
Edgar
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Streamlined Reporting Process – Embedded in Report
Writer
ERP
ERP
HFM
XBRL Tagged
10-Q in
XBRL
ERP
Supplemental Data
Edgar
XBRL Tagged
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