Explain how ASU 2016-1 affect congruence between GAAP and IFRS

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Accounting

Explain how ASU 2016-1 affect congruence between GAAPand IFRS

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The following table highlights key differences between the ASU 20161 in GAAP and IFRS Topic GAAP IFRS Debt securities loans and receivables Classification and measurement depend largely on the legal form of the instrument ie whether the financial asset represents a security or a loan and managements intent for the instrument At acquisition debt instruments that meet the definition of a security are classified in one of three categories and subsequently measured as follows Held to maturity amortized cost Trading FVNI Available for sale fair value with changes in fair value recognized through OCI FVOCI Loans and receivables that do not meet the definition of a security are generally measured at amortized cost Loans held for sale are measured at the lower of cost or fair value Regardless of an instruments legal form classification and measurement depend on the instruments contractual cash flow characteristics and the business model under which they are managed A financial asset passes the cash flow characteristics test if its contractual terms give rise on specified dates to cash flows that are solely See Answer

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