- CFA Exams
- 2023 Level I
- Topic 3. Financial Statement Analysis
- Learning Module 17. Financial Reporting Standards
- Subject 5. Comparison of IFRS with Alternative Reporting Systems
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Subject 5. Comparison of IFRS with Alternative Reporting Systems PDF Download
A significant number of the world's listed companies report under either IFRS or U.S. GAAP. Although these standards are moving toward convergence, there are still significant differences in the framework and individual standards. Frequently, companies provide reconciliations and disclosures regarding the significant differences between reporting bases. These reconciliations can be reviewed to identify significant items that could affect security valuation.
User Contributed Comments 21
User | Comment |
---|---|
yxten1 | what is the difference between current costs of liabilities and settlement value of liabilities? by definition provided, they sound the same to me..Anybody care to explain? |
JimM | I think it has to do with time and the phrase "normal course of business" in the settlement definition. Current cost is if it is paid off today. This might include a penalty for early payment, if the terms of the liability include such. Settlement cost is if it is paid off as normal. If there was an early payment penalty, it would not be included in this. |
Drzewes | That's a nice thing - u pay hundreds of bucks for Schweser notes and still there's no valuation basis theory there, while a review tool (AN) has got it alright. |
Drzewes | Great conclusion JimM |
nneks | JimM is right xcept on the point of penalties...Current cost of liabilities refers to paying today...ONLY. And the settlement value is the cash or cash equiv. EXPECTED to be paid to settle all accounts(liabilities) |
endlessfin1te | Effective financial framework: Transparent Consistent Comprehensive |
zeiad | effective financial framework = transparent +consistent+comperhensive |
jpducros | This details are pretty tough to remember. Any hint to do so ? |
Mgtw | Current value = settle NOW = early penalties Settlement value = settle when due = no early penalties |
YOUCANDOIT | Key Words: reconcilations and disclosures Different reporting systems affect security valuation. |
ybavly | Thanks YOUCANDOIT! |
robbiecow | I like the following: An Effective Framework is "Clear To C" Comprehensive Transparent Consistent |
ankurwa10 | Train (Transparency) crossing (Comprehensive) Connecticut (Consistency) |
leon121 | How about: Trains Come Consistently |
sahilb7 | Hahaha! Good one leon121! |
jamcarr27 | any difference between objectives-oriented and principles-based? Or are they the same thing? |
spmadoff | The two qualitative characteristics of financial statements are: (1) Relevance and (2) Faithful Representation. Not Reliable |
nmech1984 | You did it YOUCANDOIT |
mali97 | can someone explain diff between NRV and Fair Value ? they seem the same by definition in the curriculum |
D3Er | Reconciliation disclosures are no longer generally available |
Patrick316 | a combination of principles and rules (sometimes referred to as “objectives oriented”). jamcarr27 |

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Tamara Schultz
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