Compare the ifrs and gaap revenue recognition policies, Financial Management

SUPERVALU INC., a large US retail grocer, had $36.1 billion in sales for its fiscal year ended February 25, 2011. SUPERVALU currently reports using US GAAP. The controller of SUPERVALU INC. has expressed an interest in understanding the differences between US GAAP and IFRS and the possible impact of converting to IFRS as it relates to revenue recognition.

The approach the controller recommended is to compare SUPERVALU's revenue recognition accounting policies to three similar companies, one reporting under US GAAP (Safeway) and two reporting under IFRS (Ahold and Loblaw Companies). Safeway, based in the US, had sales of $43.6 billion during fiscal year ending December 31, 2011. Ahold, based in the Netherlands, operates retail food stores and had sales of €30.3 billion for its fiscal year ended January 1, 2012 (its 2011 fiscal year). Loblaw Companies Ltd. is Canada's largest food distributor and a leading provider of drugstore, general merchandise and financial products and services. Loblaw had sales of $31.3 billion Cdn. for the 52 weeks ended December 31, 2011.

Additionally, knowing that major changes to US GAAP are coming soon, the controller is also worried about the impact that the proposed revenue recognition and leasing standards will have on its financial reporting.

Required

  • For each of the 4 companies, obtain and review the accounting policies and disclosures for the following areas from the SEC filings and annual reports:
  • Revenue recognition
  • Properties (including disclosures outside of the financial reports) and leases
  1. The filings and annual reports are attached.
  2. Please answer the following questions to help the SUPERVALU controller in his analysis.

QUESTION 1

Compare the US GAAP revenue recognition policies and disclosures contained in the SUPERVALU and Safeway financial statements. Identify similarities and differences in revenue recognition policies, disclosure content, and style.

QUESTION 2

Compare the IFRS revenue recognition policies and disclosures contained in the Ahold and Loblaw Companies Group financial statements. Identify similarities and differences in revenue recognition policies, disclosure content, and style.  

QUESTION 3

Compare the US GAAP policies and disclosures to the IFRS policies and disclosures. Identify similarities and differences in revenue recognition policies, disclosure content, and style.  

QUESTION 4

Identify a list of matters for consideration that may result in changes in SUPERVALU's accounting policies under the existing revenue recognition guidance if they switch to IFRS. Discuss any potential challenges of adopting IFRS for revenue recognition.

QUESTION 5

Overall, what are some of the issues that SUPERVALU will need to consider regarding the proposed revenue recognition standard. Do you expect that the new standard will have a significant effect on the amounts and timing of SUPERVALU's revenue recognition? Given the business model of each of the 4 grocery chains, would you expect that the effects would differ across the 4 companies?

QUESTION 6

What are some of the issues that SUPERVALU will need to consider regarding the proposed leasing standard? Do you expect that the new standard will have a significant effect on SUPERVALU's financial reporting? Do you expect that the new standard will have a significant effect on SUPERVALU's property management strategy? Given the way each of the individual grocery chains structures its property holdings and leases, would you expect that the effects would differ across the 4 companies?

Posted Date: 3/9/2013 2:55:36 AM | Location : United States







Related Discussions:- Compare the ifrs and gaap revenue recognition policies, Assignment Help, Ask Question on Compare the ifrs and gaap revenue recognition policies, Get Answer, Expert's Help, Compare the ifrs and gaap revenue recognition policies Discussions

Write discussion on Compare the ifrs and gaap revenue recognition policies
Your posts are moderated
Related Questions
Eco Tyre Ltd. (ETL) - incorporated in year 2003 and entered into automobile tyre manufacturing business by introducing a new tire manufacturing technology. Over the years, ETL has

Sinking fund provisions is a pool of funds set aside to repay the debt. Under this, certain amount of money is kept aside every year form profit. It is then used

What is the investment opportunity schedule (IOS)?  How does it help financial managers make business decisions? The investment opportunity schedule illustrates graphically pro

Q. Benefits of Interest rate swaps? Interest rate swaps may provide several benefits to companies including: - The ability to get finance at a cheaper cost than would be p


a)  What two legal documents should the couple ensure are up-to-date if they want a sound estate plan?  What would happen if either became incapacitated or died and didn't have any

This question tested the core area of specifically gradually consolidation and acquisitions (control to control). The principle of calculation of goodwill at the date where control

Q. Working capital management? Every business needs funds for the two purposes for its establishments and to carry out day to day operations. Long terms funds are required to c

TR has recently been promoted to his first management position. In the past, he very much enjoyed working as part of a team, but is having some difficulty in adapting to his new ro

Question 1: i) Is there a stable and inverse link between unemployment and inflation? ii) The government announces that expansionary policies will be enacted in a view