The book Accounting for Equity and Other Comprehensive Income: Dual Reporting Under US GAAP and IFRSs by Francesco Bellandi, discusses the similarities and differences in accounting for equity and other comprehensive income under the United States Generally Accepted Accounting Principles (US GAAP) and the International Financial Reporting Standards (IFRS). It also discusses the accounting requirements under the United State's Stock Exchange Commission's (US SEC) rules and regulations. The author has also gone at great length to review relevant exposure drafts (both US GAAP and IFRS), discussion papers, research literature and other convergence efforts of the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) related to this topic following what the author calls a “multidisciplinary and multi‐standard comparison approach” (p. 14). In this book, the author proposes an overall approach to equity which preserves the clean‐surplus concept of income and which would not violate the corporate governance of the various accounting jurisdictions.
The US GAAP and the IFRS have been widely accepted as two of the more prominent international accounting standards. The convergence of the US GAAP to IFRS has created a demand for the understanding of the workings and applications of both standards. According to the American Institute of Certified Public Accountants (AICPA), many companies (users of US GAAP and other non‐users of IFRS) would use IFRS if they, their auditors and other users of their financial statements understand IFRS (AICPA, 2008). Thus, this book is timely. Not only has the author addressed the informational needs of the players in the accounting industry, he has also drawn, based on his vast experience, practical implications of reporting under both standards.
This book comprises eight chapters and a worksheets section. Chapter 1, Introduction and Scope of Book, provides the reader with an overview and significance of the discussions that will follow in the various chapters. In this chapter, the author discusses the Financial Statement Presentation Project, a joint project between FASB and IASB to provide a more consistent and comprehensive financial statements presentation. This project is significant as it is the standard setters' attempt to enhance the credibility and usefulness of financial reporting which includes the reporting of equity and other comprehensive income. This project is also discussed in other chapters especially when it pertains to the presentation of the topic at hand in the financial statements signifying that presentation is an important and integral part of producing high‐quality financial reports.
From Chapters II to VII, the accounting treatment and concepts of equity, retained earnings, other comprehensive income and each caption of the equity section in the statement of financial position are explained in great detail, not only under the different accounting jurisdictions but also from different perspectives including owners'/investors' and legal capital perspectives. Chapter IV also provides a detailed discussion of the presentation of the equity and its components in the statement of financial position.
Chapter VIII expounds the treatment and presentation of taxes on equity items or intra‐period tax allocation, including income tax on equity issuing costs, share‐based payment transactions, revaluation surplus and other items of comprehensive income. There is also a section on the income tax impact from first‐time adoption of IFRS.
The multitude of concepts and accounting treatments leads to various implications and raises several issues in the implementation of the accounting standards. Thus, to facilitate the reader's understanding, each chapter begins with an in‐depth discussion of terminology and definitions of terms gleaned from the relevant standards and frameworks under US GAAP and IFRS as well as the other literature. Numerous examples are provided to illustrate salient points.
The worksheet section at the end of the book contains 81 worksheets which provide illustrations to further enhance the readers' understanding of the subject‐matter. The worksheets include summaries of the significant points of the Financial Statement Presentation Project, findings of the author's comparative studies, illustrations of reporting under US GAAP and IFRS and alternative presentation models under the US GAAP.
A notable strength of this book, compared to other books on comparative financial reporting standards is that in each chapter, there are commentary sections where the author highlights the similarities, differences and grey areas on the subject‐matter between US GAAP and IFRS as well as other accounting jurisdictions. In these sections, the author also provides criticism of the related literature. These are especially useful for researchers. Worthy of mention is the planning point sections within each chapter where the author provides recommendations and proposes several resolutions to issues that may be faced by practitioners and other corporate staff.
The US SEC had proposed a roadmap to IFRS in 2008, which would probably make it mandatory for all US public companies to file their financial statements in IFRS beginning in 2014 (AICPA, 2008). This roadmap also allowed some US companies which met certain criteria to use IFRS to file their financial statements for the financial year ending on or after 15 December 2009 using IFRS (Dual GAAP, 2010). Hence, it is recommended that the practitioners and preparers of financial statements associated with these companies as well as the corporate staff of those multinational entities who have to prepare financial reports under both IFRS and US GAAP refer to this book to understand better the complexities of such work. They may find the discussion on the major implications of dual reporting for companies in Chapter II and the illustrations on differences between reporting under IFRS and US GAAP in the worksheet section particularly useful.
Although a large number of companies, particularly those in the European Union, adopted IFRS for the first time in 2005 (AICPA, 2008; Dual GAAP, 2010), there are still many more companies all over the world which have yet to adopt the IFRS. Thus, it is also recommended that these first‐time adopters of IFRS use this book as a point of reference. Although the book is not focused on first‐time adoption of IFRS, there are plenty of discussions pertaining to this area of interest.
In conclusion, this book would make an excellent reference for researchers, academics and students of international accounting. This book is also recommended to practitioners, preparers of financial statements and other corporate staff especially those involved in multinational corporations. Non‐native speakers of English may find the book heavy reading but this should not detract the book's significant contribution towards the understanding of IFRS and US GAAP.
