For each of the items below, determine which is US GAAP guidance and which is IF
ID: 2576677 • Letter: F
Question
For each of the items below, determine which is US GAAP guidance and which is IFRS guidance. In some instances, the answer is both US GAAP and IFRS, or neither.
Standard
US GAAP
IFRS
A.
Allows FVO
Does not allow FVO
B.
Allows recognition of day-one gains and losses
Does not allow recognition of day-one gains and losses
C.
Defines fair value as the transaction price
Defines fair value as the exit price
D.
Requires transfer of effective control (including establishing legal isolation, transfer of the right to pledge the assets, and no repurchase obligation) for derecognition of a transferred asset
Requires transfer of risks and rewards of ownership and a control test to determine whether the transferor retains control over the assets transferred
E.
Requires that financial instruments be sorted into specific categories for classification and measurement purposes
Does not require financial instruments to be sorted into specific categories for classification and measurement purposes
F.
Requires recognition of foreign exchange gains and losses in Net Income for AFS instruments with foreign exchange components
Require recognition of foreign exchange gains and losses in OCI for AFS instruments with foreign exchange components
Standard
US GAAP
IFRS
A.
Allows FVO
Does not allow FVO
B.
Allows recognition of day-one gains and losses
Does not allow recognition of day-one gains and losses
C.
Defines fair value as the transaction price
Defines fair value as the exit price
D.
Requires transfer of effective control (including establishing legal isolation, transfer of the right to pledge the assets, and no repurchase obligation) for derecognition of a transferred asset
Requires transfer of risks and rewards of ownership and a control test to determine whether the transferor retains control over the assets transferred
E.
Requires that financial instruments be sorted into specific categories for classification and measurement purposes
Does not require financial instruments to be sorted into specific categories for classification and measurement purposes
F.
Requires recognition of foreign exchange gains and losses in Net Income for AFS instruments with foreign exchange components
Require recognition of foreign exchange gains and losses in OCI for AFS instruments with foreign exchange components
Explanation / Answer
Standard US GAAP IFRS A Allows FVO Yes Yes Does not allow FVO B Allows recognition of day-one gains and losses Yes Yes Does not allow recognition of day-one gains and losses C Defines fair value as the transaction price Yes Defines fair value as the exit price Yes D Requires transfer of effective control (including establishing legal isolation, transfer of the right to pledge the assets, and no repurchase obligation) for derecognition of a transferred asset Requires transfer of risks and rewards of ownership and a control test to determine whether the transferor retains control over the assets transferred Yes Yes E Requires that financial instruments be sorted into specific categories for classification and measurement purposes Yes Yes Does not require financial instruments to be sorted into specific categories for classification and measurement purposes F Requires recognition of foreign exchange gains and losses in Net Income for AFS instruments with foreign exchange components Require recognition of foreign exchange gains and losses in OCI for AFS instruments with foreign exchange components Yes Yes
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