US GAAP to IFRS Conversion. Consolidated balance sheet (statement of financial position)

  US GAAP to IFRS conversion Name Institution Date       Reporting entities need to prepare and present a complete set of financial statements in each financial year including notes and statement of financial position when certain accounting policies are adopted. Even though, the conceptual financial reporting frameworks underlying U.S. GAAP and IFRS are very similar, there are differences in the way some items are recognized and recorded in the financial statements. IAS 7 requires that all the reporting entries present a statement of cash flows, which analyzes the changes in cash and cash equivalents.  IAS 7 Statement of Cash Flows focuses on the preparation of the so cash flow statement and establishes the direct method and indirect method of preparation, but it recommends the first since it considers that it provides more of information.  The paper will focus on in the recast statement of Ford’s cash flows and changes in the presentation of the statement of financial position  The presentation of cash flows by segments makes it easier to understand the relationships between the entity’s cash flows as a whole and those of each of its component parts, the variability and availability of the cash flows in different segments. There were no changes in the taxes on income in the recast cash flow statement as IAS7 (35)-36 requires that they are disclosed separately and classified under the operating cash flows segment. On the other hand, IAS allows the Interest, dividends to be in either the operating or financing activities classification, but since the dividends are returns on investments they were still calcified under activities in the recast statement (Baik, et al, 2016). In the cash flow statement the equity investment (earnings) losses in excess of dividends received was placed in the financing activities rather than operating activities as was the case in the US GAAP. While the payment excludes dividends,  the assumption that such equity investments are similar to dividends means that they can be treated in  similar way  in the cash flow statement under GAAP dividends paid are under financing activities, but under the IFRS, they can be financing and operating. IAS7 (38) covers the dividends from joint ventures and associates while IAS7 (31), (33) other dividends (IAS, 2018).   The IFRS highlights that the deferred tax liabilities and deferred tax assets are to be classified as non-current, and there has been convergence with the US GAAP a s  these items are also recorded under the classification. Nonetheless if there are adjustments and disclosures this should be noted under IAS 8 (Bellandi, 2012).  The acquisitions and divestitures affect the deferred tax asset and liabilities as this did not change as already noted in the notes, and since these are estimates similar estimation methods would be used and future losses would be carried forward. The notes provide relevant information relevant information on the entity and this presentation is relevant in both the US GAAP and IFRS. The statement of financial position (balance sheet) reflects the financial situation of an economic entity at a certain date. Its structure is made up of asset, liability and equity accounts or stockholders' equity, where both IFRS and US GAAP indicate how to classify these items in the financial statement. The IFRS, requires the mandatory submission of the financial statements annually to the authority control bodies in a country, where the financial statements that must be presented under the IFRS. At a minimum, the IFRS requires that statement of financial position contain property, plant and equipment classifications, trade debtors and other accounts receivable, inventories, trade creditors and other accounts payable, provisions and equity classes.  IFRS requires that the some information is presented in the statement of financial position or the notes.  US GAAP also highlights the need for notes and there are similarities between the two frameworks. For instance, IAS 2 requires that the inventories are disaggregated into different categories like the raw materials, work in progress, merchandise and finished products. In the original balance sheet this breakdown was in note 9 inventories where the total inventories were $8.898 billion (Baik, 2018). Similarly, the figure is recorded in the statement of financial position and further elaborated in the notes section. International Accounting Standard No. 1 (IAS 1) on the presentation of Financial Statements requires the  distinction between current and non-current, current assets, current liabilities,  disclosures within the body of the balance, disclosures within the body of the balance and in the body of the balances or in the notes (IAS, 2018). As such, under IFRS, an entity presents the current and non-current assets, as well as the current and non-current liabilities, as separate categories in its statement of financial position, while focusing on liquidity as the non-current assets and liabilities come first than the current ones.  Similarly, the decision of whether to present additional items depends on the amount and nature of asset and liabilities, liquidity, function of asset and terms of the liabilities (Bellandi, 2012). It is necessary to focus on liquidity and the classification of asset and liabilities into these categories.   References Baik, B., Cho, H., Choi, W., & Lee, K. (2016). Who classifies interest payments as financing activities? An analysis of classification shifting in the statement of cash flows at the adoption of IFRS. Journal of Accounting and Public Policy, 35(4), 331-351. Bellandi, F. (2012). The Handbook to IFRS Transition and to IFRS U.S. GAAP Dual Reporting. Hoboken: John Wiley & Sons. Ford. (2016). Ford Annual Report 2016. Retrieved from IAS. (2018). IAS 7 — Statement of Cash Flows. Retrieved from   Appendix Cash flow statement

12 months ended	Dec 31, 2016
Net income	$        4,607.00
Depreciation and tooling amortization	$        9,023.00
Other amortization	$         (306.00)
Provision for credit and insurance losses	$          672.00
Pension and other postretirement employee benefits (OPEB) expense (income)	$        2,667.00
Net loss on extinguishment of debt	–
Net gain on investment securities	–
Loss on retiree lump-sum settlements	–
Equity investment (earnings) losses in excess of dividends received	$         (178.00)
Foreign currency adjustments	$          283.00
Net (gain) loss on changes in investments in affiliates	$         (139.00)
Stock compensation	$          210.00
Net change in wholesale and other receivables	$      (1,449.00)
Provision for deferred income taxes	$        1,478.00
(Increase) decrease in accounts receivable and other assets	$      (2,855.00)
(Increase) decrease in inventory	$         (815.00)
Increase (decrease) in accounts payable and accrued and other liabilities	$        6,595.00
Cash changes in operating assets and liabilities	$      2,925.00
Other	$            (1.00)
Net cash provided by operating activities	$    19,792.00 Updated on January 26, 2024 Get the Whole Paper! Download for $126.69 Not exactly what you need? Do you need a custom essay? Order right now: Order 👀 Other Visitors are Viewing These APA Essay Samples: Financial Reporting. The Currency Translation Adjustment (CTA) 3 pages/≈825 words | 3 Sources | APA | Accounting, Finance, SPSS | Case Study | Foreign Currency Transactions: Jones Corporation. Case Study 3 pages/≈825 words | 3 Sources | APA | Accounting, Finance, SPSS | Case Study | Risk Assessment Case Study. What is the threat? Accounting, Finance 3 pages/≈825 words | 3 Sources | APA | Accounting, Finance, SPSS | Case Study | © Essayzoo.org 2026 We are an established and reputable company, with over 10 years in the essay business. 517 3,901 738 1,173 208 Terms of Service | Privacy Policy | Essays for Sale | Essay Rewriter | APA Generator Tool | Topic Generator | Text Summarizer | Thesis Statement Generator EssayZoo Sign In Forgot password? Not register? Register Now!