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I will pay for the following essay Income Statements of International Financial Reporting Standards. The essay is to be 4 pages with three to five sources, with in-text citations and a reference page.
I will pay for the following essay Income Statements of International Financial Reporting Standards. The essay is to be 4 pages with three to five sources, with in-text citations and a reference page.Download file to see previous pages...
In addition, the US GAAP treatment allows either single step or multiple steps format for income statement captions. According to Epstein (2011), under US GAAP, expenses such as cost of sales and administrative expenses have to be classed by function whereas in IFRS, expenses can be classed by function or nature. According to US GAAP treatment, classification of extraordinary items is permitted under certain circumstances and it can also be segregated within operating income. In contrast, IFRS bans classification of unusual items although it permits segregation of such items. Epstein (2011) states that the US GAAP considers estimated operating results of a discontinuing operation while measuring the expected gain or loss on disposal. on the other hand, IFRS reports actual operating results of a discontinuing operation as incurred. US GAAP provides a broader definition for discontinued operations while IFRS sets a narrow definition. Under US GAAP, restructuring costs are recognized only when it becomes necessary but IFRS recognizes restructuring costs when it is announced. Finally, additional comprehensive income items may be presented in changes in stockholders’ equity statement under US GAAP. but, this practice is not permitted under IFRS treatment. Differences in Balance Sheets As in the case of income statement, the IFRS balance sheet is also dissimilar to a typical US GAAP balance sheet. In the opinion of Epstein (2011), limited guidance on offsetting of assets and liabilities is a characteristic feature of US GAAP. however, IFRS insists specific guidance on offsetting of assets and liabilities. In case of IFRS, financial position’s classified statement is essential unless liquidity ordering is more meaningful. In contrast, such a statement is not required under US GAAP. Differences also exist in the definition of current/noncurrent between IFRS and US GAAP. The US GAAP treatment does not allow offsetting of assets and liabilities with various counterparties but it allows offsetting with same counterparties if and only the intention is to settle “net” (Epstein, 2011). On the other hand, IFRS permits some offsetting of assets and liabilities with various counter parties if legal provision allows it. Exclusion of long-term debt from current liabilities is a specific feature of IFRS. The US GAAP treatment refinances the exclusion of long term debt. The IFRS treatment states the minority interests as a component of equity while US GAAP guidelines restrict the presentation of minority interests as equity. As per the structure of US GAAP balance sheet format, entries are presented as total assets balancing to total liabilities in addition with shareholders’ equity. In contrast, IFRS entries include current and non-current assets and current and non-current liabilities. While US GAAP presents items on the basis of decreasing order of liquidity, the IFRS presents the items in the increasing order. Advantages of IFRS to End Users Generally company management, shareholders, investors, and third parties such as banks and other financial institutions are the end users of financial statements. They get ranges of advantages if companies use IFRS accounting in financial statements. To the extent that financial statement information is not available form external sources, investors and other external users give emphasis on company financial statements.