The Handbook to IFRS Transition and to IFRS U.S. GAAP Dual Reporting

6.1 CHAPTER PREVIEW

This chapter provides ready-made dual reporting tools to assist financial statement preparers in designing the structures of the statements of changes in equity under IFRSs, U.S. GAAP, and SEC rules and regulations, as well as to reconcile respective captions and line items.

This chapter first discusses which circumstances warrant a statement of changes in equity and when note disclosures suffice. It highlights major differences for SEC registrants and foreign private issuers. It also explains the IFRS accommodation available to small and medium-sized entities, as well as the perspective of certain specialized industry guidance.

Next, it moves to the conceptual ground of the statements of changes in equity. Depending on the body of standards, such a statement may have the purpose of reconciling equity balances, analyzing changes in retaining earnings, or reporting comprehensive income. Unlike U.S. GAAP, IFRSs recently moved to a radical distinction between such a statement, as a means of reporting owner changes in equity, and the statement of comprehensive income, which presents nonowner changes in equity. The interaction of those three elements creates complex presentation and disclosure alternatives.

The chapter goes on to discuss the structure of the statements of changes in equity. The format introduced by the 2007 revision of IAS 1 innovates dramatically with reference to previous IFRS practice and U.S. GAAP. By inhibiting disaggregation of comprehensive ...