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There are the significant differences between U.S. GAAP and IFRS. One of the main ones is their conceptual approach; rule-based vs. principle based accordingly. This particular comparison focuses on the significant differences between U.S. GAAP and IFRS related to earnings per share.
The guidance related to earnings per share in U.S. GAAP is included in Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 260, Earnings Per Share. In IFRS, the guidance related to earnings per share is contained in International Accounting Standard (IAS) 33, Earnings per Share.
Some Accounting differences between U.S. GAAP and IFRSs affect net income (or loss) available to common shareholders (or the equivalent). Thus, resulting in differences in EPS.
Among them we have;
• The Scope- Under U.S. GAAP, ASC 260-10-15-3 provides a scope exception for investment companies and wholly owned subsidiaries. Under IFRSs, paragraph 2 of IAS 33 does not give any scope exceptions for investment companies or wholly owned subsidiaries.
• Numerator (Earnings) Differences- The many differences between the two standards impact the organization's net earnings. Therefore, the numerator can differ even when the denominator stays the same.
• Application of the Two-Class Method to Participating Securities- Under U.S. GAAP, ASC 260 presents detailed guidance on executing the two-class method of computing EPS. This guidance is not present under IFRSs.
• Tax effect on the application of treasury stock method and Presentation of cash flow per share- The inclusion of tax effects in assumed proceeds and U.S. GAAP forbids the presentation of cash flow per share in the financial statements. IFRS does not have a similar restriction.
• Differences in diluted EPS year-to-date period shares calculation, instruments with multiple settlement alternatives are also impacted areas were the two regulations differ in treatment.
References
Doupnik, T., Hoyle, J. B., & Schaefer, T. (2014). Partnerships: Formation and Operation. In T. Doupnik, J. B. Hoyle, & T. Schaefer, Advanced Accounting (12th ed., p. 537). Hoyle.
Forgeas, R. (2008, Jun 6). Is IFRS That Different From U.S. GAAP? CPA Insider. doi:http://www.ifrs.com/overview/General/differences.html
Stuart, R. (n.d.). U.S. GAAP vs. IFRS: Earnings per share at-a-glance. Retrieved November 2, 2016, fromhttp://rsmus.com/pdf/us_gaap_ifrs_earnings_per_share.pd
(n.d.). IAS Plus. Retrieved November 02, 2016, from http://www.iasplus.com/en-us/standards/ifrs-usgaap/ep
(n.d.). IAS Plus. Retrieved November 02, 2016, from http://www.iasplus.com/en/standards/ias/ias33