ABSTRACT
This chapter focuses on the extent of harmonisation in group accounting practices and indicates where differences remain between International Financial Reporting Standards (IFRS Standards) and US GAAP (generally accepted accounting principles). Definition of a group is principles-based under IFRS Standards but rules-based under US GAAP. Both focus on control, but the definitions may lead to different interpretations of particular circumstances. Acquisition accounting is required under IFRS Standards and US GAAP but some jurisdictions would still prefer to retain uniting of interests as an option. Common control and pushdown accounting are examples of current issues where there is no single answer. Accounting for operating segments was regarded an example of the US position dominating the change to the IFRS Standard during the convergence process. Goodwill and impairment continue to limit comparability across IFRS Standards and US GAAP, both in measurement and clarity of disclosure. Accounting for associates and joint ventures under IFRS Standards follows the equity accounting method favoured by US standard setters. Proportionate consolidation, previously applied in some European countries, is no longer permitted under either system. Foreign currency translation is aligned across IFRS Standards and US GAAP, but differences remain where hyperinflation is present in a foreign subsidiary.
