Handbook | December 2021

 

Insight

Handbook: IFRS® compared to US GAAP

Latest edition: Side-by-side comparison of IFRS® Standards and US GAAP.

Regina Croucher

Regina Croucher

Partner, Dept. of Professional Practice, KPMG US

+1 816-802-5840

This publication helps users understand the significant differences between IFRS Standards and US GAAP, and provides a summary of differences encountered most frequently. This publication focuses primarily on recognition, measurement and presentation.

Applicability

  • Public companies
  • Private companies that do not adopt the private company accounting alternatives 

Relevant dates

  • Annual reporting periods beginning on January 1, 2021, including forthcoming requirements for subsequent periods

Bridging the expectations gap

The corporate world is changing. Today’s businesses are expected to act with purpose and to report fully on that purpose. Beyond merely profit, companies are pursuing goals that will support their stakeholders and the planet. More than ever, they are accountable to growing numbers of active stakeholders – including governments and regulators across the world – for their approach to environmental, social and governance issues.

This is driving changes in expectations about what information businesses need to provide in their annual reports and financial statements. In the past year, the IFRS Foundation has formed a new International Sustainability Standards Board to set the global baseline and bring the same rigor to sustainability reporting as it does to financial reporting today. The goal is to drive globally consistent, comparable and reliable sustainability reporting using a building blocks approach. Because national and regional jurisdictions are expected to build on that global baseline, this will impact all companies, including those reporting under IFRS Standards and US GAAP.

In the meantime, while these enhanced reporting requirements are being developed, many companies choose to bridge the expectations gap by reporting their information using non-GAAP measures. The SEC has stricter rules on the use of non-GAAP measures, so differences are more likely.

This edition of our comparison of IFRS Standards and US GAAP is based on 2021 calendar year-ends, with 2022 and later requirements included as forthcoming requirements. The effective dates of different requirements play a key role in understanding the GAAP differences at any point in time.

Report contents

  • The conceptual framework
  • Statement of financial position
  • Specific items of profit or loss and OCI
  • Broad transactions, such as consolidation, business combinations, fair value measurement, leases
  • Financial instruments

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