While the SEC moves toward a 2011 vote on whether to require U.S. public companies to report using IFRS, a more compact version of the international standards is already an option, subject to state board approval, for U.S. private companies. Now there’s a free online tool to help preparers understand how that streamlined standard compares to U.S. GAAP.
The IFRS for SMEs-U.S. GAAP Comparison Wiki, available at wiki.ifrs.com, is a collaborative resource launched in January for understanding differences between the two sets of financial reporting standards. IFRS for SMEs is a simplified version of full IFRS aimed at meeting the needs of private company financial reporting users. It eliminates some of the requirements meant specifically for public entities.
The wiki was designed to provide a comprehensive and detailed comparison of IFRS for SMEs to U.S. GAAP. Previously, only high-level comparisons were available, according to Robert Durak, a senior technical adviser for the AICPA. When fully developed, it will include comparisons of all sections of IFRS for SMEs and will be updated as new standards emerge. It was created by the AICPA Accounting Standards team and can be updated and edited by anyone in the profession.
Each section of the wiki is presented as a three-column table. The first column specifies the IFRS for SMEs paragraph number; the second column presents what the IFRS for SMEs requirement is; and the third column presents the AICPA staff’s views on how corresponding requirements in U.S. GAAP compare.
For example, under the “Total comprehensive income and profit or loss” section 2.45 of the “Concepts and Pervasive Principles” content area, the IFRS for SMEs column explains this IFRS “does not allow the recognition of items in the statement of financial position that do not meet the definition of assets or of liabilities regardless of whether they result from applying the notion commonly referred to as the ‘matching concept’ for measuring profit or loss.”
The U.S. GAAP column explains the difference: Concepts are the same. But the current authoritative literature permits recognition as assets of some items that do not meet the definition of an asset, such as debt issue costs.
That third column is where the wiki part comes in. Wikis are Web sites that can be edited on an ongoing basis by knowledge experts in the community they serve. In this case, users can improve the descriptions of corresponding U.S. GAAP and how GAAP differs from IFRS for SMEs. These improvements can take the form of additions, clarifications, or fixes to incorrect content.
Using a wiki platform should speed the buildout of the comparison tool and boost the quality by “expanding the development effort beyond the staff of the AICPA,” Durak said. “By using the wiki platform, the AICPA can tap into the vast reservoir of accounting knowledge within the profession and collaboratively develop this tool with our members and others who choose to participate.”
This is the first AICPA wiki, but the Institute may introduce others following the launch of the new aicpa.org Web site.
HOW TO CONTRIBUTE
Anyone preparing or thinking of preparing financial statements under IFRS for SMEs in the U.S. or interested in the differences between the standards and U.S. GAAP is a potential user and contributor. There is no requirement to be a CPA or an AICPA member.
Registration is only required to make edits or comments, not to use the wiki as a resource.
Users are limited to editing the content contained in the U.S. GAAP column. A tutorial of a few sentences located on the wiki site explains how the process works.
Edits will be anonymous—the user’s name will not be listed, though site administrators will know who made them. AICPA technical staff will monitor and review contributions to the wiki for accuracy. If they identify edits as inaccurate or of poor quality, they will reverse or correct them. They can temporarily or permanently ban editors who consistently post changes or additions that are inaccurate or inconsistent with its purpose.
The full text of IFRS for SMEs is available at the International Accounting Standards Board’s Web site.
—By Alexandra DeFelice, a JofA senior editor. To comment on this article or to suggest another article, contact her at firstname.lastname@example.org or 212-596-6122.