The differences in classifications of cash flows between IFRS and U.S. GAAP.

Discuss the differences in classifications of cash flows between IFRS and U.S. GAAP.
What impacts will these have on U.S. companies?
Cover the differences with the classifications of contingent liabilities between U.S. GAAP and IFRS. Be sure to cover the topics of possible, probable, and bright-line tests.
When looking at cash and cash equivalents definitions between IFRS and U.S. GAAP, discuss the differences for the following:

Best estimates
Risks
Uncertainties”

 

Sample Solution

The differences in classifications of cash flows between IFRS and U.S. GAAP

International Financing Reporting Standards (IFRS) is a set of international accounting standards, which state how particular types of transactions and other events should be reported in financial statements. IFRS are less restrictive. Both interest received and dividends received can be classified as operating or investing activities. U.S. GAAP allow to classify them as operating activities only. Under IFRS, interest paid and dividend paid are classified either as an operating or as a financing activity. On the other hand, according to U.S.GAAP, interest paid is an operating activity and dividend paid is a financing activity. U.S.GAAP always classify taxes as operating activities, but under IFRS a portion of tax expense can be allocated to investing or financing activities if it can be directly assigned there. Also, under IFRS bank overdrafts are part of cash equivalents. However, under U.S. GAAP, bank overdrafts are not cash or cash equivalents and are included in financing activities.

t to proceed these actions, as he constantly found a middle ground, where it can be lawful to do such things but never always (Begby et al (2006b), Page 326-31). This is supported by Frowe, who measures the legitimate tactics according to proportionality and military necessity. It depends on the magnitude of how much damage done to one another, in order to judge the actions after a war. For example, one cannot simply nuke the terrorist groups throughout the middle-east, because it is not only proportional, it will damage the whole population, an unintended consequence. More importantly, the soldiers must have the right intention in what they are going to achieve, sacrificing the costs to their actions. For example: if soldiers want to execute all prisoners of war, they must do it for the right intention and for a just cause, proportional to the harm done to them. This is supported by Vittola: ‘not always lawful to execute all combatants…we must take account… scale of the injury inflicted by the enemy.’ This is further supported by Frowe approach, which is a lot more moral than Vittola’s view but implies the same agendas: ‘can’t be punished simply for fighting.’ This means one cannot simply punish another because they have been a combatant. They must be treated as humanely as possible. However, the situation is escalated if killing them can lead to peace and security, within the interests of all parties.

Overall, jus in bello suggests in wars, harm can only be used against combatants, never against the innocent. But in the end, the aim is to establish peace and security within the commonwealth. As Vittola’s conclusion: ‘the pursuit of justice for which he fights and the defence of his homeland’ is what nations should be fighting for in wars (Begby et al (2006b), Page 332). Thus, although today’s world has developed, we can see not much

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