Differences Between Nigerian GAAP And IFRS
Differences between Nigerian GAAP and IFRS Similar to the United States, the transition from GAAP to IFRS in Nigeria involves dual reporting, which satisfies reporting requirements for both accounting models while the reconciliation occurs. Because of ongoing convergence projects, the extent of the specific differences between IFRS and GAAP is shrinking. Yet significant differences do still remain. Such differences exist in the structure of an annual report. Formally known as the “Profit and Loss statement” under Nigerian GAAP, the Income Statement (under IFRS) recognizes that only operating costs and profits for continuing operations will be shown, and any discontinued items will be combined for discontinued activities. Where as previously, operating costs were split between continuing and discontinued operations. Also, dividends are now charged directly to reserves, and earnings Per Share for both continuing operations and discontinued operations are now being reported. Nigerian GAAP requires extraordinary items to be presented in the profit and loss statement and must distinct from the ordinary income and expenses for the period. They are considered in determining the profit and loss for the period. Yet, IFRS prohibits the presentation of extraordinary items in statement of comprehensive income or in the notes. IFRS requires that the balance sheet include finance lease receivables, deferred tax assets, available for sale investments. This will be shown under the heading Non-Current Assets. The cash statement of flow is now split into three main headings, net cash from operating activities, net cash used in investing activities and Net Cash used in Financing Activities. Net Cash from operating activities under Nigerian GAAP related to operating profit but now relates to profit after interest and tax. Only publicly listed companies in are required to prepare a statement of cash flow under Nigerian GAAP, IFRS requires this from all entities. In Nigerian GAAP,