US GAAP or IFRS: which should your company use?

Most private US companies report under US GAAP. This checklist helps you spot the situations where IFRS, or IFRS-based reporting for a parent company abroad, may come into play.

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• Is your company owned by a parent that reports under IFRS?
• Do lenders or investors specify a reporting framework in your agreements?
• Are you planning to list on an exchange outside the United States?
• Do you consolidate subsidiaries that report under a different framework?
• Has your auditor or tax preparer asked for statements on a specific basis?
• Does your revenue recognition policy follow the same principles a parent company abroad uses?
• Do you lease equipment or property in a way that needs separate treatment under each framework?
• Are your inventory costing methods (such as LIFO) something US GAAP allows that IFRS does not?
• Would a sale process or acquirer expect statements prepared on a specific basis?
• Do your loan covenants reference a defined accounting framework by name?
• Has your board or investors asked for a reconciliation between the two frameworks?
• Are stock-based compensation awards accounted for consistently with how a parent or investor group reports them?