IFRS vs GAAP for Level-2

Question

These differences in are in addition to the Level-1 differences that I have posted earlier from my notes. My observation in level-2 questions in text book and schweser is that they do not ask the differences directly, instead we should be doing our calculations keeping in mind if the company is using IFRS or GAAP. Such questions are usually found in Intercorporate investments and Pension problems. We also need them while converting from IFRS to GAAP and viceversa.

Please Note:
1. Though care has been taken please note this notes may contain some mistakes and I may have missed out some differences. Request you to please validate once while going through the points. You cannot afford to do silly mistakes in FRA given its weightage in the exam. Each question in item set carries weightage of (1/120 = 0.83% approx)
2. The notes I prepared is for June-2013 exam.

Please do feedback in case any errors found or to add anything. 
    GAAPIFRS   Intercorporate Investments   Joint VentureEquity MethodProportionate Consolidation Preferred.(But Equity also allowed)   Unrealized Gains and Losses(Available for sale)When UNrealized, Reported in Other comprehensive income. When realized, moved into income statement Same as GAAP, except for unrealized gains and losses on Foreign exchange, where they are recorded on Income statements only.   Reclassification of investment for Held For tradingAllowedNot Allowed   Impairment of financial assetsIn Both, AFS and HTM securities to be evaluated for impairment at end of reach reporting period. We do not do it for HFT as we recognized both realized and unrealized as and when    Impaired if decline in value not temporary. Write down in treated as loss in i/c statementReversal Not allowed Impaired if at least one loss event occurred and its effect of future cash flows can be reliably measured.For Debt security: Events include default on interest or 
            principal, bankruptcy or reorganization (credit downgrade’ Lack of liquid market 
            is not loss event)
            
            Reversal allowed in Debt securities
            
            For Equity: When experienced substantial decline or facing big 
            problems In Equity Reversal not allowed    
        Goodwill2 steps
            
            1. If carrying value of reporting unit (including goodwill) exceeds fair value, 
            impairment exists
            
            2. Impairment measurement = CV-implied fairvalue Implied Fair 
            Value = Fair Value – fair value of net assets
            
            Impairment Loss=Initial Good will – 2 Impairment and Loss=CV-Fairvalue   
    QSPEAllowedNot allowed   
    Full and partial Good willRequires full goodwill methodBoth 
    partial and full goodwill allowed   
        Employee Benefits   
        B/S PresentationB/S asset(liability)=funded status   
    Past service costsOCI, Amortized over time into income statement
    Immediately expensed.   
        Current service costIncome statementIncome statement   
    Interest costIncome statementIncome statement

Expected ReturnIncome statementIncome statement

Actuarial Gain/LossOCI, Amortized over time into income statement (Corridor 
            approach) All in OCI   
    PresentationAggregated and presented as single item.Components
    may be presented separately   
        Net Pension expenseNet pension expense including interest expense is 
            included as operating expenseComponents of periodic pension cost can be 
            included in various line items   
        Shared based compensationStock options: 
            Allocated over time if vested period is over time to income statement. If 
            immediately exercised, declared full in i/c statement.Fair Value: Determined by option-pricing or BSM model. Multinational Operations Deciding functional currencySimilar under both1. Currency that influences sales prices of goods and services2. Currency of country whose competitive forces and regulations mainly determine the sale price of goods and services3. Currency that labor, material and other costs4. Currency from which funds are generated5. Currency in which receipts from operating activities are usually retrieved.    When subsidiary in hyperinflation environmentDo not adjust for inflation. Use temporal method (Treat functional currency same as presentation currency)Adjust for inflation and use current rate method

indigonation5 · Answer

Amazing share! :) 
Do we have to remember Level-1 differences for Level-2?

Zee Tan · Answer

Awesome share - have a promote :)