What Is an Accumulated Benefit Obligation?

Accounting system (accounting system) is a system that classifies, registers, summarizes, and analyzes, verifies, and reports results in business books and financial transactions. It is a general term for the rules, methods, and procedures that should be followed for accounting work. . The State's unified accounting system refers to the system of accounting calculation, accounting supervision, accounting institutions and accountants, and accounting work management formulated by the financial department of the State Council (ie, the Ministry of Finance) in accordance with the Accounting Law. According to the "Accounting Law", the State's unified accounting system is formulated by the Ministry of Finance under the State Council; the provinces, autonomous regions, municipalities and the competent department of the State Council's business administration can formulate on the premise that they do not conflict with the Accounting Law and the unified national accounting system. Local area and department's accounting system or supplementary regulations.

The accounting system (accounting system) is used for business transactions and financial transactions.

The content of the accounting system is detailed and simple. A detailed accounting system should include:

Difference between IFRS and US GAAP

1. In the calculation method of inventory cost, IFRS stipulates that the use of the first-in-first-out method is prohibited. US GAAP stipulates that the LIFO method can be adopted.

2. On the reversal of inventory impairment, IFRS stipulates that it must be reverted when certain conditions are met. US GAAP regulations cannot be reversed.

3. In the classification of interest received and paid in the cash flow statement, IFRS regulations may be included in cash flows from operating activities, investment activities or financing activities. US GAAP regulations must be classified as business activities.

4. On construction contracts where the proportion of work cannot be determined, IFRS stipulates the cost recovery method. US GAAP provides for contract completion laws.

5. On the basis of reporting segments, IFRS provides for division by business and region. US GAAP provides for division based on the composition of information reported to senior management within the company, which may or may not be based on business and region.

6. Based on the measurement of squares, plant and equipment, IFRS stipulates that revaluation or historical costs can be used. If it is measured by revaluation, it will be listed based on the accumulated depreciation and impairment loss after the fair value on the revaluation date. US GAAP regulations often require the use of historical costs.

7. In terms of termination benefits, IFRS stipulates that there is no distinction between special and other termination benefits, and termination benefits are confirmed when the employer indicates that it will pay. US GAAP stipulates that when an employee accepts the conditions provided by the employer and the amount can be reasonably estimated, the "special" (one-time) termination benefit is confirmed; when the employee is likely to be entitled and the amount can be reasonably estimated, the contract termination benefit is confirmed.

8. In recognizing the cost of past services related to established benefits, IFRS requires immediate recognition. US GAAP provides for amortization over the remaining years of service or life.

9. In the defined benefit plan, there is no minimum requirement for the minimum amount of liabilities to be recognized in IFRS. US GAAP stipulates that the minimum amount of liabilities to be recognized is the unfunded cumulative benefit obligation.

10. On the limitation of the recognition of pension assets, IFRS stipulates that the recognized pension assets must not exceed the unrecognized past service costs, actuarial losses, and economic benefits derived from returning funds from the plan or reducing contributions to future plans. The total net value of the present value of the benefits. US GAAP provides no such limit on the amount of confirmation.

11. At the time of confirming the reduction of profits, IFRS stipulates that when the relevant enterprise has clearly stated that it will reduce the benefit plan and has announced it, the reduction of profits and losses shall be confirmed. The US GAAP provides that until the relevant employee is fired or the plan is terminated or amended, the reduction in profits is recognized, which may occur after it is clearly indicated and announced.

12. In the measurement of the profit and loss resulting from the reduction of the benefit plan, IFRS stipulates that the reduction of gains or losses includes changes in the present value of the defined benefit obligation; any changes in the fair value of the plan assets; any related actuarial gains and losses that have not been previously recognized 2. Unrecognized amounts due to application of transition clauses and share of past service costs. US GAAP stipulates that although unrecognized actuarial gains or losses are written off in proportion to unrecognized transitional assets and liabilities, unrecognized actuarial gains and losses after the transition period are not affected by planned reductions.

13. IFRS stipulates that capitalization is an optional accounting policy on the cost of borrowing assets that require considerable time to complete. US GAAP requires a capitalization policy. In terms of the types of borrowing costs that can be capitalized, IFRS regulations include interest, certain ancillary costs, and conversion differences as an interest adjustment. US GAAP regulations usually include only interest.

14. In the temporary investment income of special borrowings for the purchase and construction of fixed assets, IFRS provides for the deduction of borrowing costs that can be capitalized. US GAAP regulations generally do not deduct borrowing costs that are capitalizable.

15. In terms of different accounting policies for investors and associates, IFRS stipulates that accounting policies must be unified. US GAAP regulations have no requirements for uniform accounting policies.

16. In the adjustment of the financial statements of operating entities in a hyperinflation economy, IFRS requires the use of general price level index adjustments before conversion. US GAAP requires entities operating in a hyperinflation economy to use their parent company's functional currency (rather than the currency in which they are in a hyperinflation economy) to prepare their financial statements.

17. In the investment of joint ventures, IFRS regulations allow the use of equity method or proportional consolidation method. US GAAP regulations generally use the equity method (except for the construction and oil and gas industries).

18. Regarding the issuer's classification of convertible bond instruments, IFRS requires that convertible bond instruments be presented as a liability component and an equity component at the time of issue. US GAAP requires the entire instrument to be fully liabilities.

19. In the interim report-recognition of income and expenses, IFRS stipulates that the interim period is an arbitrary reporting period (with certain exceptions). US GAAP stipulates that the medium term is part of the whole year (with some exceptions).

20. On the signs of impairment, IFRS stipulates that when there is evidence of asset impairment, detailed impairment calculations must be performed if the book value of the asset exceeds the asset's use value (the discounted value of the asset's expected future cash flow) and the fair value The higher value of the reduced cost of sales is impaired. US GAAP stipulates that if the book value of an asset exceeds its total expected future cash flow (no discount is needed), indicating that there is evidence of asset impairment, detailed impairment calculations must be performed.

21. In the measurement of impairment losses, IFRS regulations are based on recoverable amounts (the higher of the value in use and the fair value less costs to sell). US GAAP regulations are based on fair value.

22. In the measurement of the residual value of assets, IFRS stipulates that it is measured at the current net sales price of the asset on the assumption that the asset has been used up and meets the expected condition at the end of its useful life. The US GAAP rule is usually the discounted value of expected income at the time of future asset disposal.

23. At the level of goodwill impairment testing, IFRS specifies a cash-generating unit or a group of cash-generating units. It represents the lowest level of organization that monitors goodwill for the purpose of internal management of the enterprise, and it cannot be larger than a business or regional segment. US GAAP requires reporting unitsa lower level within a business segment or organization. In the calculation of goodwill impairment, IFRS stipulates a one-step method to compare the recoverable amount of the cash-generating unit (the higher of the fair value minus the cost of sales and the value in use) and its book value. US GAAP stipulates a two-step method: comparing the fair value of the reporting unit with its book value including goodwill; if the fair value is greater than the book value, there is no impairment (the second step is not required); comparing the embedded fairness of goodwill Value and its book value. Regarding the impairment of intangible assets with indefinite years, IFRS stipulates that goodwill and other intangible assets with indefinite years are included in cash-generating units, and the cash-generating units are tested for impairment. US GAAP requires goodwill to be included in cash-generating units, and other intangible assets with indefinite useful lives are tested separately.

24. On the reversal of impairment losses, IFRS stipulates that if certain criteria are met, the impairment losses should be reversed, but the impairment loss of goodwill cannot be reversed. US GAAP stipulates that impairment losses cannot be reversed.

25. In the measurement of preparations, IFRS stipulates that the best estimate for liquidating debts usually adopts the expected value method and requires the use of discounted methods. US GAAP stipulates that the liquidation of debt may occur at a lower value, and certain provisions do not require discounting. In the follow-up expenditures for the purchase of research and development projects under development, IFRS stipulates capitalization if the definition of development is met. US GAAP provides for costing.

26. On the revaluation of intangible assets, IFRS stipulates that revaluation can only be performed when there is an active market for intangible assets for trading. US GAAP regulations usually cannot be revalued.

27. For investment in unlisted equity instruments, IFRS requires that if it can be measured reliably, it is measured at fair value, otherwise it is measured at cost. US GAAP requires measurement at cost. IFRS rules do not apply to the reclassification of financial instruments into or out of the categories held for trading. US GAAP stipulates that if the relevant assets are transferred into a portfolio for short-term profit, the financial instrument shall be classified from the category available for sale into the category held for trading. However, financial assets held for trading cannot be classified as available-for-sale financial assets.

28. In offsetting amounts due and receivable from different parties, IFRS stipulates that if there is a legal offsetting contract, it can be offset. US GAAP regulations cannot be offset.

29. On the subsequent reversal of impairment losses, IFRS stipulates that, if certain conditions are met, The value loss needs to be reversed. US GAAP prohibits reversal of impairment losses on HTM and AFS.

30. Based on the measurement of investment real estate, IFRS stipulates that a cost-depreciation-impairment model or a fair value model can be used, and changes in fair value are included in profit or loss. US GAAP regulations usually require the use of historical costing methods, withdrawing both depreciation and impairment.

31. Based on the measurement of agricultural products, livestock, fruits and forest products, IFRS requires the use of fair value, and changes in fair value are accounted for in profit or loss; US GAAP rules usually use historical costs. However, agricultural products that have been harvested and are for sale And livestock will be calculated at fair value less cost of sales.

32. On embedded derivatives in insurance contracts, IFRS stipulates that when the characteristics and risks of embedded derivatives are not closely related to the main contract and their values are related to the value of insurance contracts, they need not be listed separately and used as derivatives Tool accounting. US GAAP requires such derivatives to be accounted for separately. For the measurement when initially classified as assets held for sale, IFRS requires that accumulated exchange differences be retained in equity. US GAAP requires that accumulated exchange differences be redistributed from equity to the value of assets held for sale.

33. In the definition of discontinued operations, IFRS requires a business or regional reporting segment or its major components. US GAAP requires reporting segments, operating segments, reporting units, subsidiaries, or a group of assets (less restrictive than the definition in B). In the presentation of discontinued operations, IFRS stipulates that after-tax profit or loss of discontinued operations shall be presented in the income statement. US GAAP stipulates that pre-tax and after-tax profit and loss of termination of operations shall be reported on the income statement.