[splash6]

To those who passed, how did you memorize the GAAP vs IFRS differences? There’s about a billion differences and I’m making a list of the differences but it seems impossible to memorize based solely on the list. Is trying to memorize them as such futile and a waste of study time?

[chandler]

In my opinion, FAR is mostly looking to see if you have a conceptual and general understanding of IFRS rather than a detailed, applied understanding. The key is knowing the major differences between the two and what each emphasizes. For the most part, minute differences between the two are beyond the scope of the CPA exam. Also, having a solid understanding of the background of each framework goes a long ways when you're using judgment to distinguish between the two.

[jeff]

You rang?

[jeff]

^ was recorded in 2014, btw.

[Dev12]

Thanks Jeff! anyone who has something more up to date on US GAAP to IFRS and vice-a-versa ?

[2bigcpa]

@splash6 The AICPA requires more than just knowing the conceptual aspect of it, but each exam can/does test different topics. I thought I would be fine with knowing only the conceptual differences, but I was wrong.

[splash6]

@2bigcpa

>”I was wrong”

Could you elaborate? I've given up on memorizing all the minute differences, it is impossible. I'm not even focusing on gaap vs ifrs, now I'm simply plowing through as much of my Becker as I can as many times as I can and then roll the dice on the exam. It is impossible to get a list of all the differences and memorize them based solely on the list.

[Asja]

I'm waiting for my NASBA applicatin to leave the review/eval stage and finally get completed so I can schedule my FAR exam for end of July…I have been going 100 miles an hour preparing using Wiley, and I think they are really good at highlighting the major differences, including with respect to answering some questions that involve numbers… Here are my notes on the major differences:

Intangibles:
Both U.S. GAAP and IFRS do not allow reversal of goodwill impairment
IFRS allows to choose between controlling interest portion of goodwill or entire amount of goodwill on consolidated financial statements.
IFRS allows intangibles to be revalued to Fair Value if there is an active market for those intangibles (U.S. GAAP doesn't allow FV revaluations for intangibles)
IFRS allows recovery of impairment losses up to the original carrying value
IFRS: does single step impairment testing – at cash generating units – so lots little goodwills vs one goodwill under U.S. GAAP

Imprairement and IFRS:
Recoverable amount: the greater of FV less cost to sell OR Value in use (which is PV of cash flows).

Recovery is always limited to original carrying value less any accumulated depreciated that may have been taken

Gains that go over and above previous losses go to OCI

Inventory and IFRS:

No LIFO under IFRSE

IFRS allows only LC or NRV valuation

IFRS allows reversal of inventory write downs up to original cost
Ex: Yr 1 write down Cost 100 – Market – 80:
dr. loss/income account 20
cr. inventory
Yr 2 recovery Cost 80, Market 150
dr.Inventory 20
cr COGS 20

Are you seeing a pattern yet?

GOOD LUCK!
Depreciation: pain in the ass – you have to do it by component – so if they give you the total cost for a bus and then its engine and seats, you have to deduct those from total cost to calculate the depreciation based on the component's useful life and then add it all all together for the total dep.exp for the bus….

[Asja]

Can someone please explain to be about effective amortization vs straight-line amortization for bond invesment premium and discount? I saw multiple choice questions that used both methods and the answers are calculated differently (usually asking what the amortized cost of the bond on the balance sheet is)

[2bigcpa]

@splash6 and @BrightLIght I believe WileyCPA stated that you need to know the differences between GAAP and IFRS if you are given a set of financial statements (the AICPA Blueprints state to apply the differences on a set of financials). My advice is to know how to apply GAAP vs IFRS and not just know the conceptual aspect.

@splash6 I would focus on the main differences between GAAP and IFRS. If you can't memorize them then you need to find a way to learn them. There are many resources to help you. I used Investopedia, Accountingtools, Accounting Coach, and the review books. I use WileyCPA so I based my studying priorities on how many MCQs WileyCPA assigns to each topic. I also take notes as I am studying and then I re-write them during my review; this has helped a lot. During my FAR re-take, I did not see the main topics usually tested by the AICPA so you might not even get a lot of GAAP vs IFRS.

[Author]

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