(6) Write-downs or the reduction of inventory value due to significant overvaluation, if compared to current market value, can be reversed in IFRS accounting if certain criteria are met. US GAAP simply prohibits the reversal of any write-downs.
(7) US GAAP implements the Completed Contract method, if percentage of completion cannot be applied in construction contracts. As opposed to IFRS accounting, wherein the cost recovery method is used.
(8) US GAAP distinguishes deferred tax on asset or liability as current or non-current based on the asset or liability for which the tax has been deferred, while IFRS recognizes deferred taxes as always current.
(9) US GAAP requires historical costs as bases for the book values of property, plant and equipment while IFRS allows revalued amount aside from historical cost. Revalued amount is one where the fair value of the asset will be reduced by subsequent depreciation and impairment costs.
(10) US GAAP recognizes as expenses the major costs of overhauling or repairing assets, while IFRS accounting treats major cost of repairs as additional or capitalized value of the asset for which the repairs were made.
(11) US GAAP does not allow recognition of gains or losses in the disposition of non-current assets, while IFRS GAAP recognizes gains or losses in said transactions.
(12) US GAAP requires a more detailed disclosure of lease maturities, while IFRS GAAP entails fewer details for its disclosure.
(13) US GAAP does not impose any limitations in the recognition of pension assets, while IFRS GAAP limits the value of pension assets to the net value of unrecognized cost of past services and actuarial costs including the current value of benefits derived from refunds, or any reduction of future contributions to the plan.
(14) US GAAP requires capitalization of interests costs on borrowing only, as against IFRS accounting which allows capitalization of all borrowing costs in relation to its asset.
(15) US GAAP accounting allows equity method in assigning valuation on investments in subsidiaries, while IFRS accounting mandates either cost method or IAS 39, but does not allow the equity method.
(16) In US- GAAP, minority interests are presented exclusively which may be between liabilities and equity; in IFRS, minority interests are included in the equity account.
(17) Impairment loss if any is measured by US GAAP standards based on fair market value. IFRS GAAP on the other hand, considers the recoverable amount which is the difference between higher values less fair market value less the selling costs.
(18) US GAAP does not capitalize development costs except costs for website development and those associated with the development of internal software, while IFRS mandate capitalization subject to certain criteria.
(19) US GAAP accounts for investments in unlisted equity instruments at cost while IFRS allows flexibility by using fair market value if it is considered as a reliable measure.
(20) US-GAAP accounting prohibits offsetting of amounts due and owed to two different entities while IFRS allows said accounting method if there is a legal-agreement to support the offsetting of transactions.
The above differences between US GAAP vs. International GAAP represent only a few of the accounting and reporting standards being resolved by the FASB and the IASB. Based on these examples, users and issuers of financial statements, whether engaged in international trade or not, will have an idea of the changes to expect in relation to their respective businesses.