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    International Accounting & Project Management

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    Application: IFRS vs. U.S. GAAP
    1. In this week's Discussion, you studied revenue recognition standards and related accounting issues for companies operating in international markets. Due to the scope of international markets and the differences in IFRS and U.S. GAAP accounting standards, accountants are also challenged with issues related to provisions, contingent liabilities and assets, employee benefits, and share-based payments.
    For this Assignment, select two of the following topics: Provisions, Contingent Liabilities, and Contingent Assets (IAS 37); Employee Benefits (IAS 19); and Share-Based Payment (IFRS 2). Consider the accounting standards related to your selected topics. Think about the major differences between IFRS and U.S. GAAP financial reporting requirements for the recognition and measurement of your topics, as well as the impact of these reporting differences on multinational companies.
    I will write a 2- to 3-page paper differentiating between IFRS and U.S. GAAP financial reporting requirements for the recognition and measurement of your selected topics. Evaluate the impact of the reporting differences of your topics on multinational companies.

    2.Final Project: Project Charter
    The project charter is one of the more important project documents. It authorizes the project, provides the purpose and justification for the project, and provides the criteria to judge project success.

    For this assignment, read the St. Dismas Assisted Living Facility case study on pages 111-112 of the Mantel text, as well as Chapter 3, pages 79-83. Create a project charter. Your project charter must be at least two pages, double-spaced, and include:

    ◦A statement about the purpose and justification for the project
    ◦A high-level description of the project requirements
    ◦A list of the primary project objectives and how success in meeting the objectives will be measured
    ◦Assumptions and constraints
    ◦High-level risks
    ◦Major project milestones
    ◦High-level/preliminary budget estimate
    ◦Key stakeholder analysis matrix including communications needs
    ◦Project approval procedure

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    Solution Preview

    International Accounting
    The two topics selected are contingency assets, and employee benefits.
    The IASB issued an exposure draft to replace 1AS 37 which is Provisions, Contingency Liabilities and Contingent Assets. The IFRC 21 is an interpretation of IAS 37 which sets out the criteria for the recognition of a liability. The IFRC 21 is effective for annual periods beginning on or after January 1, 2014.
    In case of US GAAP the contingency assets are recognized according to ASC 800 fair value measurement if the fair value can be determined during the measurement period. Otherwise, those assets are recognized at the acquisition date in accordance with ASC 450. Contingency assets that do not meet either of the criteria are accounted for in accordance with other applicable provisions. In case of IFRC the contingency assets are not recognized. In case of US GAAP if the contingency assets are recognized at fair value there should be a rational basis for subsequently measuring and accounting for those assets and liabilities depending on their nature. The IAS 37 provides overall guidance for recognition and measurement criteria of provision and contingencies. In IFRS disclosures regarding provisions and contingency assets may be omitted if they can be expected to seriously prejudice the position of the entity in dispute with other parties. A similar exception does not exist under the US GAAP.
    The effect of these provisions on the accounts of multinational companies is that under the US GAAP multinational companies can record contingency assets at fair value. This situation occurs regularly because large multinational companies frequently make acquisitions. In contrast contingency assets are not recognized under the IFRS.
    Employee benefits reflect 1AS 19. The IAS 19 is effective for financial years beginning on or after January 2013. Under the IFRS employee benefits include formal plans or agreements, legislative requirements, and informal practices that create constructive obligation. Also, employee benefits include short term benefits, post employment benefits, and other long term employee benefits. All IFRS requirements are included in IAS 19.5 but in US GAAP employee benefits are covered in different areas such as compensation (ASC 710), Compensation (ASC 715), Compensation (ASC 712), and Compensation (ASC 718 related to Share based payments). The main differences are that IFRS gives guidance about short term benefits. In contrast US GAAP does not specifically address short term benefits. According to IFRS profit sharing and bonus plans are recognized when and only when there is present legal or constructive obligation to make payment and a reliable estimate can be made. In contrast, US GAAP requires that if a bonus is based on attaining a specific goals over a period of time is accrued based on the results ...

    Solution Summary

    The response provides you a structured explanation of project management and international accounting issues . It also gives you the relevant references.