Please enable JavaScript.
Coggle requires JavaScript to display documents.
Differences between IFRS and UK GAAP - Coggle Diagram
Differences between IFRS and UK GAAP
Goodwill and intangibles
IFRS
Goodwill is not amortised but tested annually for impairment
Intagibles under IFRS can exist indefinitely
UK GAAP (FRS102)
Goodwill is amortised annually
Intangible assets and goodwill have a finite life but not exceeding 10 years if no reliable estimate can be made
Negative goodwill
UK GAAP
Credited in the P&L in the periods in which the non-monetary assets are recovered with any excess recognised over the period expected to benefit
IFRS
Negative goodwill is credited in P&L immediately as it arises (acquisition date)
Impairment
UK GAAP
All non financial assets reviewed for indicators of impairment where is an indication
IFRS
All non financial assets with finite lives reviewed where there is an indication
Goodwill and other intangibles with indefinite lives are reviewed annually
Investment property
UK GAAP
Initially measured at cost and subsequently measured at fair value at the reporting dates with changes recognised in the P&L
IFRS
Initially measured at cost and subsequently a choice is provided between fair value and the cost method
Business combinations
UK GAAP
Transaction costs are included as part of acquisition cost
Congtingent consideration is included as acquisition cost if it is probable that the amount will be paid and it can be measured reliably
IFRS
Transaction costs are expensed
Contingent consideration is recongised regardless of probability of payment
Investments in associates and joint ventures
UK GAAP
In consolidates accounts, investments in associates are generally accounted for using the equity method
For an investor that is not a parent, a choice is provided between the cost model and fair value model
IFRS
Accounted for using the equity method
Assets held for sale
Not covered
The decision to sell an asset is assessed as an indicator of impairment
IFRS
Covered by IFRS 5
Requires classification of items as held for sale if the carrying amount is recovered through sale rather than use
Discontinued operations
UK GAAP
Considered as discontinued when they are sold or terminated
Presented line by line on the face of the P&L
IFRS
Defined differently with focus on shift of operational focus
Presented as a single amount on P&L
Statement of cash flows
UK GAAP
Qualifying entities may take advantage of exemption from preparing a statement of cash flows
IFRS
No similar exemptions
Financial instruments
UK GAAP
Basic financial instruments are mostly measured at amortised cost using the effective interest method
Other or complex financial instruments are measured at fair vlaue
IFRS
No such distinction between basic and other financial instruments
Development costs
UK GAAP
Provides choice to either expense as they are incurred or capitalise and amortise them
IFRS
Capitlisation is mandatory where criteria are me t