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Intercompany transactions under IFRS vs US GAAP

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IFRS is principle based accounting standards unlike the rule based US GAAP. Can you cite one or two examples of this fact using the accounting for intercompany transactions.

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Solution Summary

Your tutorial is 212 and gives two examples of how US GAAP has "bright line" rules and IFRS has standards that give the principle but not exact rules on how to apply them.

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Under US GAAP, you must consolidate a subsidiary if you own 50% or more of the subsidiary stock. That is the "rule" or "bright line" that is clear where one treatment start and the other ends. Under IFRS, you must consolidate a subsidiary if you "control" them. In other words you might own less than 50% but have de facto control anyway. Control ...

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Carol Sargent, PhD
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  • MSc, University of Virginia
  • PhD, Georgia State University
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