Ifrs Vs. Us Gaap Essay

1015 Words5 Pages
For years, IASB and FASB have been working diligently on convergence with IFRS. Different countries develop their own accounting standards based on their unique rules, principles, business base, and tax; however, with globalization it’s very important to reconcile between different accounting standards. Two major standards are the US GAAP and IFRS, and they share many differences and similarities. One of the main differences is the conceptual approach and framework, IFRS is principle based whilst US GAAP is rule based (Forgeas, 2008). When comparing IFRS and US GAAP, we can discover many differences in several areas. Based on note 27 of Swisscom’s consolidated financial statements, today we are going to reconcile and restate its financial statements based on capitalization of interest cost, restructuring charges, depreciation expense, capitalization of software, and restructuring charges of affiliates. Debit Credit Property, plant and equipment $ 54.00 Depreciation and amortization $ 5.00 Interest expense $ 13.00 Retained earnings $ 46.00 First, let’s look at capitalization on interest cost. Note 27 states that under US GAAP, Swisscom would have capitalized CHF 13 million and amortized 5 million for current year. Based on this information, we can make an adjustment entry to debit 54 million property, plant and equipment; 5 million to depreciation and amortization. On the other hand, credit interest expense of 13

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