Swiss GAAP and US GAAP are two different sets of accounting standards that are used to guide the preparation of financial statements. While both sets of standards have similar objectives, there are some key differences between the two that are important to understand.
One of the main differences between Swiss GAAP and US GAAP is the level of detail and complexity in the standards. Swiss GAAP tends to be less detailed and more flexible than US GAAP, which is known for its complexity and stringent requirements. This difference in approach is reflected in the way that financial statements are prepared and presented under each set of standards.
Another difference between Swiss GAAP and US GAAP is the level of discretion allowed in the application of the standards. Swiss GAAP allows for a greater degree of discretion in the interpretation and application of the standards, whereas US GAAP is more prescriptive in nature. This difference can have significant implications for companies operating in different countries and may require them to adopt different accounting practices.
A third difference between Swiss GAAP and US GAAP is the level of transparency required in financial reporting. US GAAP requires more detailed and transparent reporting, with a focus on providing investors and other stakeholders with a clear understanding of a company's financial position and performance. In contrast, Swiss GAAP allows for more flexibility in the presentation of financial information, which may not be as transparent.
Overall, it is important for companies to understand the differences between Swiss GAAP and US GAAP and to choose the set of standards that is most appropriate for their operations. While both sets of standards have their strengths and weaknesses, the choice of GAAP will depend on the specific needs and circumstances of the company.
Useful and relevant financial statements
Starting with annual reports for 2005 and interim reports for 2006, most Swiss companies whose equity shares are listed on the main board of the Swiss Exchange are required to prepare their financial statements using either IFRSs or US GAAP. The method of offsetting with equity favoured by many entities reporting under Swiss GAAP FER is a lot easier for users, but fails to completely convince in terms, say, of accountability. The Circular on IFRS is revised and amended annually. Can be reported using either the cost model or the revaluation model GAAP does not allow the revaluation model Investment property Property which is not used in regular operations of the company Purely and IFRS concept. The identity of the related party has to be disclosed only if this is necessary for the understanding of the transaction. Derivatives not qualifying for hedge accounting are measured at fair value with changes in fair value recognised in the income statement.
Swiss GAAP FER Definition
No summary publication can do justice to the many differences of detail that exist between IFRS, US GAAP and Swiss GAAP FER. Liabilities for future losses or other costs expected to be incurred as a result of the business combination cannot be recognised. It states that the inventory at the end of the reporting period is to be recorded at the original cost or the current market price, whichever is lower. The variable interest model is discussed below. Depends on classification of investment — if held to maturity or loans and receivables, they are carried at amortised cost; otherwise at fair value. Since more and more companies are adopting the Swiss GAAP FER standards, KPMG has released its 9th edition of the Swiss GAAP FER brochure. They are written from the point of view of financial statements for single entities, with additions for groups.
Handbook: IFRS® compared to US GAAP
Goodwill is recognised as the surplus of acquisition cost over the newly valued net assets and to be capitalised as an intangible asset. Within the framework of a Swiss GAAP FER conversion project, it is important to determine the basics regarding the scope of action and design options so management can make well-founded decisions during implementation. This can be a problem if being able to compare different entities is a major concern. The calculation required under IFRS, by contrast, regularly results in significant liabilities. Management, investors, shareholders, financiers, government, and regulatory agencies rely on financial reports for decision-making.
