§ 01
| Topic | U.S. GAAP | IFRS |
|---|---|---|
| Inventory (LIFO) | Allowed | Prohibited |
| R&D Costs | Nearly all expensed immediately | Development costs capitalized once 6 criteria met |
| Impairment Reversals | Prohibited (one-way door) | Allowed for long-lived assets (not goodwill) |
| Leases | Operating vs finance distinction | Virtually all finance leases (IFRS 16) |
| Credit Losses | CECL — lifetime expected at origination | IFRS 9 — 3-stage model, less front-loaded |
| Revenue | ASC 606 (5-step) | IFRS 15 (5-step, substantially converged) |
§ 02
The three highest-impact differences: LIFO prohibition (inflates IFRS inventory/income), R&D capitalization (deflates IFRS expenses), and impairment reversal rules (IFRS can write values back up).
§ 03
Pick a U.S. company and a non-U.S. peer in the same industry. In **Fundamentals**, compare R&D as a % of revenue and intangible asset balances.
§ 04
A U.S. semiconductor company (GAAP, LIFO) shows lower inventory and higher COGS than a Taiwanese peer (IFRS). Both have identical operations. Why?
§ 05
§ 06
A company reports under both GAAP and IFRS. Revenue: GAAP $1B, IFRS $1.05B. Why might this happen?
Five questions · AI feedback
Sit with the ideas.
You are comparing a U.S. semiconductor company (GAAP, uses LIFO) to a Taiwanese competitor (IFRS). The U.S. company has lower reported inventory, higher COGS, and lower net income. Both companies have nearly identical operations and pricing. What adjustments should you make for a fair comparison?
Why: