Explore BrainMass
Share

US GAAP vs IFRS

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

1. Under the U.S. GAAP, financial assets and liabilities such as securities and other financial instruments can fall into three categories: available for sale, held for trading, and held to maturity. It is important to consider how these financial assets and liabilities are reported on income statements. For instance, depending on the standards under U.S. GAAP and IFRS 9 Financial Instruments, assets and liabilities may be measured at fair value or at amortized cost. For this Discussion, locate and select a multinational company. Consider the measurement requirements for assets and liabilities in the company's host country and home country. Think about the implications of these differences on the company's financial reporting.
I will write a brief description of the multinational company you selected. Analyze measurement requirements for assets and liabilities in the company's host country and home country. Evaluate implications of these measurement differences on the company's financial reporting. Be sure to support your response with references to this week's Learning Resources. (half page)

2. According to the Course Text, trade across international markets has grown tremendously and represents a significant portion of the world economy. This increase in international trade has been accompanied by an increase in trade across the foreign exchange (FX) market. As with any trade and investments, trade and investments in the FX market pose a risk for multinational companies as well as for investors. The FX market is by nature inherently risky, and risks such as those associated with exchange rates and interest rates require companies and investors to effectively assess, manage, and reduce risk. To do so, international managers can use instruments such as foreign currency transactions, hedging foreign exchange risk, and accounting for derivatives. Consider how international managers utilize these instruments to manage risks when operating in international markets. Think about how publicly traded multinational companies report these types of instruments and transactions to users of financial statements (Half page).

© BrainMass Inc. brainmass.com October 25, 2018, 9:31 am ad1c9bdddf
https://brainmass.com/business/financial-accounting-bookkeeping/us-gaap-vs-ifrs-577226

Solution Preview

The multinational company selected is Wal-Mart. It is an American multinational retail corporation that runs chains of large discount stores and warehouse stores. It is the world's largest corporation. It is a US corporation that has operations in several countries including the UK. The home country accounting in US GAAP and the host country accounting in the UK is IFRS. Under the IFRS, held to maturity impairment losses can be reversed up to amount of the original impairment, however, these are not permitted by the US GAAP. In case of trading securities the IFRS and US GAAP are similar. In case of available for sale securities, the IFRS changed to recognized gain or loss through OCI except for impairment losses. In case of Wal-Mart the 2013 annual report shows that the company uses derivative financial instruments for hedging and ...

Solution Summary

The answer to this problem explains differences between US GAAP and IFRS. The references related to the answer are also included.

$2.19
See Also This Related BrainMass Solution

Is there a difference in approach to valuation by US GAAP and IFRS?

Reviewing balance sheets in detail.
Is there a difference in approach to valuation by US GAAP and IFRS?
Discuss and note two specific differences. In addition, briefly:
? Distinguish between an expense (expired cost) and an asset.
? Distinguish between current and long-term assets.
? Distinguish between current and long-term liabilities.
? Review Apple?s balance sheet and provide two examples of each of the above categories.
? Discuss retained earnings and how income or loss and dividends affect this account. Review Apple?s retained earnings account and explain how it changes between the two past years.
? Comment on at least three differences between Apple?s and Philips? balance sheets.
? Does Apple or Philips have more debt?
? Which of the two companies is the bigger one? Explain your reasoning.

View Full Posting Details