IFRS 1 -- ThyssenKrupp Group First Year Conversion Assignment

IFRS 1 -- ThyssenKrupp Group First Year Conversion - naming ExampleSome of the pecuniary components that allow be partakeed from the revolution from US GAAP take the manipulation of intangible pluss much(prenominal) as development costs, goodwill and intangible pension assets. Tangible assets such as property jell and equipment will require adjustments in how investment property is dealt with because of the differences in treatment under both methods. IFRS uses a components approach in dealing with property, plant and equipment and so they are shown independently inclusive of the depreciation charged on these assets. Impairment of assets is also dealt with differently and most operating(a) leases will now be classified as finance leases. This will guard implications for profits and for the tangible assets symmetry in the balance sheet. Investment property will now be a separate pull out item on the balance sheet as a result of these changes. Under IFRS all non-current a ssets send packing qualify as assets held for sale while under US GAAP only long lived asset can, once they meet specific criteria. There are other interesting cases that will affect deferred assess assets, inventories, trade accounts receivables and other receivables such as embedded derivatives and prepaid pension costs. It is interesting to note that the step date of the pension plan will coincide with the year end and so this will affect the prepaid pension cost shown in the financial statements. The treatment of contracts will not only have implications for inventories but also accounts receivable, accounts payables and of course income and therefore the net profit of ThyssenKrupp. IFRS requires a different treatment for minority interest than that used under US GAAP. While US GAAP showed minority interest as a separate item between liabilities and equity IFRS requires that it be shown as part of equity. As a result of these changes the figures for the 2004/2005 will be ver y different. The differences relating to changes in equity and other elements are therefore require to be shown in the notes to the financial statements. IFRS 1 also requires that the differences be clearly explained so that the various stakeholders which includes, shareholders, analysts, potential investors and others are able to understand them and their effects on the financial statements. Finally, it is very important to note that IFRS1 defines an entitys first IFRS financial statements as being the first annual financial statements in which an entity adopts IFRS by make it clear that IFRS is being complied with by way of an unreserved and explicit statement of that fact (Ernst & Young 2009). The conversion from US GAAP to IFRS has impacted various elements of the financial statements. According to Ernst and Young (2009) the main principle is luxuriant retrospective application of IFRS standards that were in effect as of ThyssenKrupps first IFRS reporting period. Some of the elements of the financial statements have been impacted positively and some negatively. The Balance Sheet elements that are explained below are property, plant and equipment inventories and minority interests. The income statement elements that will be explained are net sales selling expenses and other operating income Balance Sheet Elements Property, Plant and Equipment m m Balance as per US GAAP 9,469 slight Reclassification 557 Other 169 (726) Balance as per IFRS 8,743 The balance as per US G