A comprehensive comparison
Content
Foreword
Abbreviations4
A short history of convergence
11
16
Consolidation
18
21
Financial Instruments
22
Inventories
26
Tangible Assets
27
Intangible Assets
31
Impairment of Assets
32
Leases
33
Revenue Recognition
35
38
Income Taxes
39
41
42
Employee Benefits
43
Share-based Payment
45
46
47
Contacts
48
Foreword
Abbreviations
CESR
EC
European Commission
EEA
EFRAG
EU
FASB
GAAP
IAS(s)
IASB
LUX GAAP Law of 10 August 1915 on commercial companies, as amended and Law
of 19 December 2002 on the commercial and companies register and on the
accounting records and annual accounts of undertakings
SEC
Canada
2009/11
Europe
2005
United States
(2009/14?)
China
2007
Mexico
2008/12
Japan
(2010 optional)
India
2011
Brazil
2010
Chile
2009
Current or anticipated
requirement or option to
use IFRS (or equivalent)
Argentina
2010
South Africa
2005
Australia
2005
Requirement
Luxembourg
Non-Listed Company
Reporting
statements
IFRS as adopted by the EU is permitted, subject to approval by
competent authorities
Listed Company Reporting
Other Considerations
Principles/Policies
Qualitative characteristics of financial statements
IAS/IFRS
IFRS
LUX GAAP
IAS 8
IAS 8
IAS 8
IAS 8
Not addressed
10
IAS/IFRS
IFRS
LUX GAAP
IAS 8
IAS 8
IAS 8
IAS 8
IFRS
LUX GAAP
IAS 1
IAS 1
IAS 1
Balance sheet:
Fixed format as required by and included
in LUX GAAP
IAS 1
Balance sheet:
Fixed format, which is split by current/noncurrent, not by order of liquidity
IAS 1
IAS 1
IAS 1
11
12
IAS/IFRS
IFRS
LUX GAAP
IAS 1
IAS 1
IAS 1
IAS 1
IAS 1
IAS 1
IAS/IFRS
IFRS
LUX GAAP
IFRS 8
Scope:
Not required, not addressed
The standard shall be applied by an entity:
whose ordinary shares are traded in a public
market
that files, or is in the process of filing,
its financial statements with a securities
commission or other regulatory organisation
to issue ordinary shares in a public market
IFRS 8
IFRS 8
IFRS 8
13
Summary
An entity shall present basic and diluted earnings per share in the statement of comprehensive
income for:
profit or loss from continuing operations attributable to the ordinary equity holders of the
parent entity and
for profit or loss attributable to the ordinary equity holders of the parent entity
Basic earnings per share shall be calculated by dividing profit or loss attributable to ordinary
equity holders of the parent entity (the numerator) by the weighted average number of ordinary
shares outstanding (the denominator) during the period
For the purpose of calculating diluted earnings per share, an entity shall adjust profit or loss
attributable to ordinary equity holders of the parent entity, and the weighted average number
of shares outstanding, for the effects of all dilutive potential ordinary shares
14
Information about the cash flows of an entity is useful in providing users of financial
statements with a basis to assess the ability of the entity to generate cash and cash
equivalents and the needs of the entity to use those cash flows
Scope
An entity shall prepare a statement of cash flows in accordance with the requirements of
this Standard and shall present it as an integral part of its financial statements for each
period for which financial statements are presented
Summary
Cash equivalents are short-term, highly liquid investments that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value
The statement of cash flows shall report cash flows during the period classified by
operating, investing and financing activities (a single transaction may include cash
flows that are classified differently)
An entity shall report cash flows from operating activities using either:
(a) the direct method, whereby major classes of gross cash receipts and gross cash
payments are disclosed; or
(b) the indirect method, whereby profit or loss is adjusted for the effects of transactions
of a non-cash nature, any deferrals or accruals of past or future operating cash receipts
or payments, and items of income or expense associated with investing or financing cash
flows
An entity shall report separately major classes of gross cash receipts and gross cash
payments arising from investing and financing activities
Cash flows from interest and dividends received and paid shall each be disclosed
separately. Each shall be classified in a consistent manner from period to period as either
operating, investing or financing activities
Cash flows arising from taxes on income shall be separately disclosed and shall be
classified as cash flows from operating activities unless they can be specifically identified
with financing and investing activities
An entity shall disclose, together with a commentary by management, the amount of
significant cash and cash equivalent balances held by the entity that are not available for
use by the group
15
Objective
To prescribe the minimum content of an interim financial report and the principles
for recognition and measurement in complete or condensed financial statements
for an interim period
Scope
The standard specifies the content of an interim financial report that is described
as conforming to IFRS. However, it does not mandate:
which enterprises should publish interim financial reports
how frequently, or
how soon after the end of an interim period
Summary
Minimum components:
-- a condensed statement of financial position
-- a condensed statement of comprehensive income
-- a condensed statement of changes in equity
-- a condensed statement of cash flows
-- selected explanatory notes
If an entity publishes a complete set of financial statements in its interim
financial report, the form and content of those statements shall conform to the
requirements of IAS 1 for a complete set of financial statements
Periods to be covered:
-- statement of financial position as of the end of the current interim period
and a comparative statement of financial position as of the end of the
immediately preceding financial year
-- statements of comprehensive income for the current interim period and
cumulatively for the current financial year to date, with comparative
statements of comprehensive income for the comparable interim periods
(current and year-to-date) of the immediately preceding financial year
-- statement of changes in equity cumulatively for the current financial year to
date, with a comparative statement for the comparable year-to-date period
of the immediately preceding financial year
-- statement of cash flows cumulatively for the current financial year to date,
with a comparative statement for the comparable year-to-date period of the
immediately preceding financial year
For an entity whose business is highly seasonal, financial information for the
twelve months up to the end of the interim period and comparative information
for the prior twelve-month period may be useful
16
IAS 34
Summary
17
Consolidation
18
IAS/IFRS
IFRS
LUX GAAP
IAS 27
(2008)
IAS 27
(2008)
IAS 27
(2008)
IAS 27
(2008)
IAS 27
(2008)
IAS 27
(2008)
IAS 27
(2008)
IAS 27
(2008)
Not required
IAS/IFRS
IFRS
LUX GAAP
SIC 12
Not addressed
IAS 28
IAS 28
IAS 28
IAS 31
Not addressed
IAS 31
19
20
IAS/IFRS
IFRS
LUX GAAP
IFRS 3
(2008)
IFRS 3
(2008)
IFRS 3
(2008)
IFRS 3
(2008)
IFRS
LUX GAAP
IAS 24
IAS 24
IAS 24
Illustration of definition
Investor x
Parent company M
Director of M
Spouse
35 %
65 %
Reporting entity
50 %
100 %
25 %
100 %
Subsidiary
Joint venture G
50 %
Joint venture B
50 %
25 %
Associate
Subsidiary D
Joint venture E
Associate F
Co-venturer Y
Subsidiary H
Associate I
75 %
Shareholder Z
= related party
21
Financial instruments1
IAS/IFRS
IFRS
LUX GAAP
IAS 32
IAS 32
Not addressed
IAS 32
Not addressed
22
Not addressed
On 12 November 2009 IASB issued IFRS 9 Financial Instruments as the first step to replace IAS 39. IFRS 9 introduces new requirements for
classifying and measuring financial assets. Those requirements must be applied starting 1 January 2013, with earlier adoption permitted.
IFRS 9 is not a subject of this document.
IAS/IFRS
IFRS
LUX GAAP
IAS 32
IAS 32
IAS 32
IAS 32
IAS 32
IAS 39
Not addressed
IAS 39
Not addressed
23
24
IAS/IFRS
IFRS
LUX GAAP
IAS 39
IAS 39
IAS 39
IAS 39
IAS 39
After initial recognition, an entity shall measure An entity shall measure financial assets at cost
the financial assets classified in the category of less impairment such that financial assets are
FVTPL at fair value through profit and loss
stated at the lower of cost or market value,
valuation above cost is prohibited
IAS 39
IAS 39
IAS 39
IAS/IFRS
IFRS
LUX GAAP
IAS 39
After initial recognition, an entity shall measure Where the total amount repayable on any debt
the financial liabilities classified in the category exceeds the amount received, the difference
of FVTPL at fair value through profit and loss
may be capitalised.
The amount of this difference must be written
off in annual instalments of a reasonable
amount and must be fully written off no later
than the time of repayment of the debt
IAS 39
IAS 39
IAS 39
IFRS 7
25
Inventories
26
IAS/IFRS
IFRS
LUX GAAP
IAS 2
IAS 2
IAS 2
IAS 41
IAS 41
IAS 41
Not addressed
Tangible Assets
IAS/IFRS
IFRS
LUX GAAP
IAS 16
Not addressed
IAS 16
IAS 16
IAS 16
IAS 16
Cost model:
After recognition as an asset, an item of
property, plant and equipment shall be carried
at its cost less any accumulated depreciation
and any accumulated impairment losses
IAS 16
Revaluation model:
After recognition as an asset, an item of
property, plant and equipment whose fair
value can be measured reliably shall be carried
at a revalued amount, less any subsequent
accumulated depreciation and subsequent
accumulated impairment losses
IAS 16
27
28
IAS/IFRS
IFRS
LUX GAAP
IAS 16
IAS 16
Not permitted
IAS 40
Not addressed
IAS 40
Not addressed
IAS 40
IAS 40
IAS 40
Not addressed
IAS/IFRS
IFRS
LUX GAAP
IAS 40
Cost model:
After initial recognition, an entity that
chooses the cost model shall measure all of its
investment properties in accordance with IAS
16s requirements for that model, other than
those that meet the criteria to be classified as
held for sale with IFRS 5
Not addressed
IAS 23
IAS 23
IFRS 5
IFRS 5
IFRS 5
IAS 20
Not addressed
29
30
IAS/IFRS
IFRS
LUX GAAP
IAS 20
IAS 20
Not addressed
Intangible Assets
IAS/IFRS
IFRS
LUX GAAP
IAS 38
IAS 38
IAS 38
IAS 38
IAS 38
IAS 38
31
Impairment of Assets
32
IAS/IFRS
IFRS
LUX GAAP
IAS 36
The recoverable amount of an asset or a cashgenerating unit is the higher of its fair value
less costs to sell and its value in use
Not addressed
IAS 36
IAS 36
IAS 36
IAS 36
IAS 36
Not prohibited.
Valuation adjustments may not be continued
if the reasons for which the value adjustments
were made have ceased to apply
Leases
IAS 17
Leases
Objective
To prescribe, for lessees and lessors, the appropriate accounting policies and disclosures for
finance and operating leases.
Summary
A lease is classified as a finance lease if it transfers substantially all the risks and rewards
incidental to ownership
Whether a lease is a finance lease or an operating lease depends on the substance of the
33
IAS 17
Leases
Summary
over the lease term, unless another systematic basis is more representative of the
pattern of benefit
Operating leases Lessors Accounting:
- assets held for operating leases are presented in the lessors statement of financial
position according to the nature of the asset and are depreciated in accordance with
the lessors depreciation policy for similar assets
- lease income is recognised on a straight-line basis over the lease term, unless
another systematic basis is more representative of the pattern of benefit
Lessors add initial direct costs to the carrying amount of the leased asset and spread
them over the lease term (immediate expensing prohibited).
Accounting for sale and leaseback transactions depends on whether these are essentially
finance or operating leases.
Under LUX GAAP, all lease costs are expensed on a timely basis
34
Revenue Recognition
IAS/IFRS
IFRS
LUX GAAP
IAS 18
IAS 18
IFRIC 13
Not addressed
35
36
IAS/IFRS
IFRS
LUX GAAP
IAS 18
Sale of goods:
Revenue from the sale of goods shall be
recognised when the entity has transferred
to the buyer the significant risks and rewards
of ownership of the goods
IAS 18
Rendering of services:
when the outcome of a transaction
involving rendering of services can be
estimated reliably, revenue associated with
the transaction shall be recognised by
reference to the stage of completion of
the transaction at the end of the reporting
period
when the outcome of a transaction
involving rendering of services cannot be
estimated, revenue shall be recognised only
to the extent of the expenses recognised
that are recoverable
Not addressed
IAS 11
Construction Contracts:
when the outcome of a construction
contract can be estimated reliably
contract revenue and contract costs shall
be recognised as revenue and expenses
respectively by reference to the stage of
completion of the contract activity at the
end of the reporting period
when the outcome of a construction
contract cannot be estimated reliably
revenue shall be recognised only to the
extent of contract costs incurred that it is
probable will be recoverable and contract
costs shall be recognised as an expense in
the period
Not addressed
IAS/IFRS
IFRS
LUX GAAP
IFRIC 15
Not addressed
IAS 18
Interest:
Shall be recognised using the effective interest
rate method
IAS 18
Royalties:
Shall be recognised on an accrual basis in
accordance with the substance of the relevant
agreement
IAS 18
Dividends:
Shall be recognised when the shareholders
right to receive payment is established
37
38
IAS/IFRS
IFRS
LUX GAAP
IAS 21
IAS 21
Not addressed
IAS 21
Not addressed
IAS 21
IAS 21
Income Taxes
IAS/IFRS
IFRS
LUX GAAP
IAS 12
IAS 12
IAS 12
Not addressed
IAS 12
IAS 12
IAS 12
IAS 12
IAS 12
Not addressed
39
40
IAS/IFRS
IFRS
LUX GAAP
IAS 12
Not addressed
IAS 12
Not addressed
IAS 12
IAS 12
Not required
IFRS
LUX GAAP
IAS 37
IAS 37
IAS 37
Not addressed
IAS 37
41
42
IAS/IFRS
IFRS
LUX GAAP
IAS 10
Not defined
IAS 10
IAS 10
IAS 10
Not required
Employee Benefits
IAS/IFRS
IFRS
LUX GAAP
IAS 19
IAS 19
Not addressed
IAS 19
Not addressed
IAS 19
IAS 19
Not addressed.
Provision usually provided, if significantly
unfunded
IAS 19
IAS 19
43
44
IAS/IFRS
IFRS
LUX GAAP
IAS 19
An entity shall:
recognise all actuarial gains and losses
in profit or loss or
recognise all actuarial gains and losses
in other comprehensive income as
an accounting policy election
Not addressed
IAS 19
Share-based Payment
IFRS 2
Share-based Payment
Summary
45
Scope
Summary
An entitys first IFRS financial statements are the first annual financial statements
46
in which the entity adopts IFRSs, by an explicit and unreserved statement in those
financial statements of compliance with IFRSs
An entity shall use the same accounting policies in its opening IFRS statement of
financial position and throughout all periods presented in its first IFRS financial statements
An entity shall explain how the transition from previous GAAP to IFRSs affected its
reported financial position, financial performance and cash flows
An entitys first IFRS financial statements shall include:
-- reconciliations of its equity reported in accordance with previous GAAP to its equity
in accordance with IFRSs for both of the following dates:
- date of transition to IFRSs; and
- the end of the latest period presented in the entitys most recent annual financial
statements in accordance with previous GAAP
An entitys first IFRS financial statements shall include, as well:
-- a reconciliation to its total comprehensive income in accordance with IFRSs for the
latest period in the entitys most recent annual financial statements
An entitys date of transition to IFRSs is the beginning of the earliest period for which
the entity presents full comparative information in accordance with IFRSs in its first
financial statements that conform to IFRSs
An entity may elect to use exemptions when preparing its first financial statements that
conform to IFRSs
This IFRS prohibits retrospective application of some aspects of other IFRSs
In addition to this publication, Deloitte has a range of tools and publications to assist in implementing and
reporting under IFRS.
These include:
www.iasplus.com
Updated daily, iasplus.com is your one-stop shop for information related to IFRS.
Deloitte`s IFRS
e-Learning modules
e-Learning IFRS training materials, one module for each IAS and IFRS and the
Framework, with self-tests, available without charge at www.iasplus.com.
Presentation and
disclosure checklist
Model financial
statements
47
Contacts
Eddy R. Termaten
Partner Luxembourg IFRS
leader
+352 451 452 488
edtermaten@deloitte.lu
Justin Griffiths
Partner
Audit
+352 451 452 692
jugriffiths@deloitte.lu
Raphal Charlier
Partner
Audit
+352 451 452 258
rcharlier@deloitte.lu
John Psaila
Partner
Audit
+352 451 452 315
jopsaila@deloitte.lu
Jrme Lecoq
Partner
Audit
+352 451 452 623
jlecoq@deloitte.lu
Karine Thil
Partner
Specialised in IFRS and consolidation
+352 451 452 452
kthil@deloitte.lu
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