International Accounting Case Study Example | Topics and Well Written Essays - 750 words

International Accounting - Case Study Example Therefore, the disposal of the building in 2013 generated a loss of (fair market value – net realizable value of the building) = ($ 2,370,000 – $ 2,100,000) = $ 270,000. This figure is recorded in the cash flow statement under the investment section. Therefore, the loss on disposal of the building does not influence either income or stockholder’s equity of the Yazd Corporation under both the US GAAP and IFRS (Santoro & Munter 2013, p. 35). Concerning the intangible assets, the regulations provided under both the IFRS and the US GAAP are direct regarding the initial measurement. The provisions require a different approach towards the initial measurement of intangible assets acquired either separately or as part of a business combination. Yazd Corporation acquired its intangible assets as part of a business combination. The intangible asset has an indefinite life thus, according to the provisions by the IFRS, should not be amortized but be subjected to impairment tests. The expected future cash flow from the continued use of the intangible assets will not affect the company’s income as at December 2013 since the anticipated cash flows are for periods after December 2013. In addition, under both the IFRS and US GAAP, the treatment of cash flows from the intangible assets is similar. Therefore, this item does not influence both the income and stakeholder’s equity when the company shifts from US GAAP to IFRS system (Santoro & Munter 2013, p. 37-38). Yazd Corporation incurred a research and development cost of $ 200,000 as at December 2013. Under the US GAAP, all the costs related to research and development that a company incurs is treated as expenditure. Whereas, under the accounting regulations set by the IFRS, only the costs related to internal research activities of a company are treated as expenditure when incurred. The costs related to product development activities are capitalized if some criteria, set by the organization, are met. As a