Related Standards Terms

ASC 326 is the US GAAP standard for credit losses. It introduced the current expected credit loss (CECL) model through ASU 2016-13, requiring companies to estimate expected credit losses over the life of financial assets from initial recognition.

ASC 340-40 Other Assets and Deferred Costs – Contracts with Customers governs the accounting for costs to obtain and costs to fulfill contracts with customers. It was introduced together with ASC 606. The IFRS equivalent is contained in IFRS 15.

ASC 460 is the US GAAP topic for guarantees. It sets out recognition, measurement, and disclosure requirements for guarantee arrangements, including product warranties.

The effective interest method allocates interest income or expense over the life of a financial asset or liability using a constant rate – the effective interest rate – applied to the carrying amount.

IAS 16 sets out the accounting for property, plant and equipment (PP&E): tangible assets held for use in production, supply of goods or services, rental to others, or administrative purposes, and expected to be used for more than one period.

IAS 23 requires companies to capitalize borrowing costs that are directly attributable to the acquisition, construction, or production of a qualifying asset as part of the cost of that asset. Other borrowing costs are expensed.

IAS 36 ensures that assets are not carried at more than their recoverable amount. If the carrying amount exceeds the recoverable amount, an impairment loss is recognized.

IAS 37 sets out when and how companies recognize provisions – liabilities of uncertain timing or amount – and when contingent liabilities and contingent assets are disclosed.

IFRS 13 defines fair value, sets out a framework for measuring it, and requires disclosures about fair value measurements. Its US GAAP counterpart is ASC 820.

IFRS 18 is the new IFRS standard for the presentation of financial statements. It was issued by the IASB on April 9, 2024, replaces IAS 1, and is effective for annual reporting periods beginning on or after January 1, 2027, with earlier application permitted.

IFRS 7 sets out the disclosures companies must provide about financial instruments: their significance for financial position and performance, and the nature and extent of the risks arising from them.

IFRS 8 requires listed companies to report financial information about their operating segments, based on how management internally reviews the business.

IFRS 9 is the international standard for the recognition and measurement of financial instruments. It became effective for annual periods beginning on or after January 1, 2018, and replaced IAS 39.