Wal-Mart will need to become acclimated to using new accounting assessments and definitions for specific balance sheet and income statements. In addition, Wal-Mart will need to comply with wider disclosure requirements and provide more comprehensive reporting on international segments. (Oracle, 2010) To help accommodate the newer reporting requirements, Wal-Mart will need to establish and vet new reporting processes. Extensive training requirements will need to be implemented to train personnel at numerous levels and functions inside a company. Wal-Mart needs to understand that the numbers they report will change under the new requirements and will need to analyze their system networks to see if they will be able to provide all the available data and realign their information management systems as needed. Also, Wal-Mart will need to relook at how they measure their performance and debt covenant compliance in regards to the new standards. The need to do this reorganization and analysis will force the company to reevaluate their budgets, as the new requirements will modify their prior numbers. (Dhar, …show more content…
The US GAAP also allows for offsetting, but requires the offsetting transaction to be law abiding and agreed on by both parties. Finally, US GAAP prevents minority interest from being represented on the balance sheet, while IFRS allows for this. (Putra, 2008)
As with the balance sheet, the new requirements of IFRS will cause variations in the income statement compared to the GAAP. Using IFRS, a company is allowed to show its expenses in any method desired, but IFRS does require that revenue; finance costs; method; tax expense; post-tax gain or loss; and profit or loss be shown at a minimum. A balance sheet may be disclosed in either a single-step or a multiple-step format under US GAAP guidelines. (Putra, 2008)
The IFRS and US GAAP allow for significant items to be disclosed separately. IFRS requires any income or expense of significant size or nature to be disclosed separately. The income statement or the notes are allowable areas where these announcements may be presented. While the US GAAP does not use the same terminology as IFRS, the divulgence of significant items are done with the income statement and the notes chronicle these items. Further, IFRS prohibits extraordinary items, while US GAAP allows for them and defines them as unusual and infrequent. (Putra,