Examples and Charts

This site has been publishing charts of account compatible with IFRS / US GAAP since 2010.

Niether IFRS nor US GAAP define, or even discuss, charts of account.

Thus each company may devise its own accounting structure and define its own account chart of accounts.

While some welcome the opportunity to use tailormade charts, many others have concluded that an off-the-rack alternative is easier, and by far more cost effective.

This likely explains why the most common keyword bringing visitors here has been "chart of accounts" or some variation.

In addition to the standardized, universal charts of account available for download to subscribers, we design bespoke charts for our advisory and outsourcing clients.

These are in especially high demand at companies that must reconcile their IFRS accounts to national GAAP for income tax purposes.

For example, Czech accounting legislation states (translated):

§ 19a Application of International Accounting Standards for Accounting and Compilation of Financial Statements

(1) An entity that is a trading company and is an issuer of investment securities admitted to trading on a European regulated market36) shall apply International Accounting Standards ("International Accounting Standards") for accounting and the preparation of financial statements. ...

Czech tax legislation states (translated):

§ 23 (2) (A) Profit or loss [shall be determined by] always eliminating all influence of International Accounting Standards, for entities who apply [the law on] accounting. A taxpayer who prepares financial statements in accordance with International Accounting Standards as governed by European Community law for the purposes of this Act shall apply special legal regulation [promulgated by the Ministry of Finance] to determine the economic result and to determine other data decisive for determining the tax base. ...

Why not a universal IFRS and US GAAP compatible chart?

While IFRS and US GAAP have converged, they are far from identical, especially the details.

For example, a quick comparison of their respective XBRL taxonomies ( link: bigfoot.corefiling.com / link: xbrlview.fasb.org) reveals significant differences in both scope and emphasis.

While it is theoretically possible to create a universal chart, it would either be cumbersome or so simplified as to be misleading.

From a practical perspective, most companies use either IFRS or US GAAP or a national GAAP as their primary system.

If they need to produce a financial report consistent another standard, it is far easier to reconcile at the statement than account level.

Since reconciliation is not a perfect solution, some companies would choose to maintain a separate IFRS / US GAAP / national GAAP books.

In this situation, separate charts of account compatible with each system is by far a superior alternative to a universal chart.

While most companies use either IFRS or US GAAP standards in the preparation of their financial reports, some companies use both.

For example, we have several European based clients with securities listed on a US stock exchange. While they could use the option, available to foreign private issues, to file financial statements produced per IFRS, they choose to file US GAAP financial statements instead.

Similarly, se have several clients who use IFRS in Europe, but whose US subsidiaries use US GAAP, not only for their US investors, but also to help produce their US tax returns.

These are, however, exceptions to the general rule that EU domiciled companies apply IFRS for financial reporting purposes and national GAAP for statutory purposes while EU subsidiaries of US companies apply US GAAP for financial reporting purposes and national GAAP for statutory purposes.

The basic charts are free to download.

Advanced charts are available to subscribers.

We also create bespoke charts tailored to each company's particular needs.

GAAP, Ltd. was established in 1994 to provide US GAAP training to subsidiaries of US companies.

In 1999, we added US GAAP advisory services.

We continued to focus on US GAAP until the European Union decided to adopt IFRS (IAS) in 2002.

As the use of IFRS grew, so did demand for IFRS training and advisory, until it comprised almost 80% of our business.

After the convergence project was wound down and the US SEC put IFRS adoption ion hold, demand for US GAAP resurged.

Today, our business.is divided almost evenly between IFRS and US GAAP.

For more information, please do not hesitate to contact us.