One key topic of CMA Part 1 is the differences between the IFRS and GAAP accounting standards. According to the CMA LOS:

Candidates should be aware of the major differences in reported financial results when using GAAP vs. IFRS and the impact on analysis.

Today’s blog will provide you a summarized list for the areas for which we will be discussing the differences between the GAAP and IFRS. A later blog article will talk about the differences in detail and its impact (IFRS & GAAP Differences – A Summary 2) . You will find this to be an excellent tool to use for a quick revision before the exam day.

Primary Areas where Differences Between IFRS and U.S. GAAP Exist:

• Inventories (costing methods, valuation and write-downs (e.g., LIFO)),
• Revenue Recognition (sale goods/services,deferred receipts&construction contract),
• Expense Recognition (share-based payments and employee benefits),
• Intangible Assets (development costs and revaluation),
• Leases (leases of land and buildings),
• Long-lived Assets (revaluation, depreciation, and capitalization of borrowing costs),
• Impairment of Assets (determination, calculation and reversal of loss), and
• Financial Statement Presentation (extraordinary assets and changes in equity).

Main Similarities Between the GAAP and IFRS in Specific Areas: