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CMA Part 1
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Textbook
Introduction
1. External financial reporting decisions
2. Planning, budgeting, and forecasting
3. Performance management
4. Cost management
5. Internal control
6. Technology and analytics
Wrapping up
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1.2.12.1 Learning outcomes
Achievable CMA Part 1
1. External financial reporting decisions
1.2. Financial transactions
1.2.12. US GAAP versus IFRS
Our CMA Part 1 course is currently in development and is a work-in-progress.

Learning outcomes

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The learning outcome statements related to the differences between US GAAP and IFRS comparisons are as follows:

  1. Expense recognition, with respect to share-based payments and employee benefits
  2. Intangible assets, with respect to development costs and revaluation
  3. Inventories, with respect to costing methods, valuation, and write-downs (e.g., LIFO)
  4. Leases, with respect to lessee operating and finance leases
  5. Long-lived assets, with respect to revaluation, depreciation, and capitalization of borrowing costs
  6. Impairment of assets, with respect to determination, calculation, and reversal of loss

Items 2-6 were covered under US GAAP earlier, with IFRS comparisons later. This previews the share-based payment and employee-benefit differences; see Differences in expense recognition, intangible assets, inventories and leases.

Topic US GAAP IFRS
Graded-vesting share-based awards Straight-line or accelerated expense recognition Accelerated method required
Defined-benefit actuarial gains/losses Amortized above the 10% corridor (greater of PBO or plan assets) Never recycled from OCI
Past service cost Amortized from OCI over remaining service period Expensed immediately in profit or loss

Exam tip: Part 1 defaults to US GAAP, but you must still identify how IFRS differs. Know cold: LIFO (permitted under US GAAP, prohibited under IFRS), impairment-loss reversal (prohibited under US GAAP, permitted under IFRS except goodwill), and intangible revaluation (prohibited under US GAAP, permitted under IFRS with an active market).

Comparison topics

  • Six areas: expense recognition, intangibles, inventory, leases, long-lived assets, impairment (US GAAP vs IFRS)

Expense recognition differences

  • Graded-vesting: US GAAP straight-line/accelerated; IFRS requires accelerated
  • Actuarial gains/losses: US GAAP amortizes above corridor; IFRS never recycles from OCI
  • Past service cost: US GAAP amortizes; IFRS expenses immediately

Exam tip distinctions

  • LIFO: allowed US GAAP, banned IFRS
  • Impairment reversal: banned US GAAP, allowed IFRS (except goodwill)
  • Intangible revaluation: banned US GAAP, allowed IFRS with active market
  • Default to US GAAP, but know IFRS contrasts
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Next  | 1.2.12.2 Differences in expense recognition, intangible assets, inventories and leases
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Learning outcomes

The learning outcome statements related to the differences between US GAAP and IFRS comparisons are as follows:

  1. Expense recognition, with respect to share-based payments and employee benefits
  2. Intangible assets, with respect to development costs and revaluation
  3. Inventories, with respect to costing methods, valuation, and write-downs (e.g., LIFO)
  4. Leases, with respect to lessee operating and finance leases
  5. Long-lived assets, with respect to revaluation, depreciation, and capitalization of borrowing costs
  6. Impairment of assets, with respect to determination, calculation, and reversal of loss

Items 2-6 were covered under US GAAP earlier, with IFRS comparisons later. This previews the share-based payment and employee-benefit differences; see Differences in expense recognition, intangible assets, inventories and leases.

Topic US GAAP IFRS
Graded-vesting share-based awards Straight-line or accelerated expense recognition Accelerated method required
Defined-benefit actuarial gains/losses Amortized above the 10% corridor (greater of PBO or plan assets) Never recycled from OCI
Past service cost Amortized from OCI over remaining service period Expensed immediately in profit or loss

Exam tip: Part 1 defaults to US GAAP, but you must still identify how IFRS differs. Know cold: LIFO (permitted under US GAAP, prohibited under IFRS), impairment-loss reversal (prohibited under US GAAP, permitted under IFRS except goodwill), and intangible revaluation (prohibited under US GAAP, permitted under IFRS with an active market).

Key points

Comparison topics

  • Six areas: expense recognition, intangibles, inventory, leases, long-lived assets, impairment (US GAAP vs IFRS)

Expense recognition differences

  • Graded-vesting: US GAAP straight-line/accelerated; IFRS requires accelerated
  • Actuarial gains/losses: US GAAP amortizes above corridor; IFRS never recycles from OCI
  • Past service cost: US GAAP amortizes; IFRS expenses immediately

Exam tip distinctions

  • LIFO: allowed US GAAP, banned IFRS
  • Impairment reversal: banned US GAAP, allowed IFRS (except goodwill)
  • Intangible revaluation: banned US GAAP, allowed IFRS with active market
  • Default to US GAAP, but know IFRS contrasts

More from US GAAP versus IFRS

  • Differences in expense recognition, intangible assets, inventories and leases
  • Differences in long-lived assets and impairment