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Da Chart Differences between IFRS/ASPE.docx

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York University
ACTG 2011
Alla Volodina

Criteria Both GAAP/ASPE IFRS Cost  Purchase price  Cost method – record asset at cost  Revaluation method (Fair Value) –  Costs directly attributable to set up  Borrowing costs may be included record at cost, but revaluate on regular for use basis OR cost method  Cost of setting up a business excluded  Borrowing for qualified assets (ones that take a while) can be capitalized  Exclude administration + overhead  Exclude abnormal costs Subsequent  Repairs/maintenance excluded  Betterment – increases useful  Betterment – costs related to major recognition life/efficiency/effectiveness parts or components Amortization  Review policy periodically,  Review policy at least annually considering significant events  Amortization based on components  Amortization based on asset class approach Impairment  2 step approach:  1 step approach:  Net Recoverable Amount (net cash  Recoverable Amount (market) < NBV flow + resid. Value) < NBV  Written down to FV  Net Realizable Value (market) < NBV  Write down should be reversed  Written down to FV  Write down cannot be reversed Basket  Allocation based on market value  No allocation method specified purchases Intangible  Criteria: (4) Assets  Separately identifiable OR contractual right to asset  Future benefits  Measurable  Controlled by entity Goodwill  = Purchase price – FV of net assets R&D Costs  Research phase – cannot capitalize  Development phase can capitalize under criteria: (6)  Reliably measurable  Technically feasible  Intention to complete + user/sell asset  Ability to use/sell asset  Asset will generate future economic benefits  Availability of resources to complete asset Liability  Requires sacrifice to settle Criteria (3)  Unavoidable  Result of past transaction Asset Criteria  Provide future benefit (4)  Be controlled by entity  Result of past transaction  Measurable Revenue  Risks and rewards of ownership Recognition transferred to the buyer Criteria (5)  Seller has no control over the goods sold  Payment reasonably assured  Revenue reasonably measurable  Costs reasonably measured Bonds  Face value = how much sold for  Proceeds = PV of cash flows using market interest rate  Maturity date  Coupon rate = interest of bond Leasing  Capital/Financing (on balance sheet)  Capital lease criteria (one must be  Finance lease criteria (one must be met)  Operating (off balance sheet) met)  Ownership – Reasonable assurance  Ownership – Reasonable assurance lessee will obtain ownership at end of lessee will obtain ownership at end lease of lease  Lease term – Length of lease term  Lease term – Length of lease term enough to provide most of economic enough to provide 75%+ economic benefit of property benefit of property  Recovery of investment – PV of  Recovery of investment – PV of minimum lease payments is most of minimum lease payments >=90% FV of asset of FV of asset  If lease asset is specialized for lessee’s needs Contingencies  Possible liability whose existence on  Accrue if reasonably measurable  Provision – liability of uncertain balance sheet depend on some and likely timing or amount. Recognized if 3 future event  Disclose if not reasonably criteria met: measurable but likely  Obligation result of past  Ignore if not reasonably transactions measurable and not likely  Probable transfer will be required  Contingent gains not recognized (more likely than not)  Reliable estimate of amount  Disclosed contingent liability – disclosed but not on balance sheet  Possible, not probable OR  Not probable or Not measurable  Remote contingency – neither disclosed nor recognized  Contingent gains on assets not recognized unless almost certain – not referred to as contingent, but just
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