Another of the better known differences between US GAAP and IFRS is the use of Last In First Out (LIFO) as a measurement basis for inventory. Although under US tax law what is in the financial statements is not generally determining in terms of taxable income, a major exception is that if an entity wants to use LIFO for tax purposes, it must also do so for financial reporting purposes. As a consequence a number of manufacturing companies in the US do use LIFO. However, it is not permitted under IAS 2 Inventories. The international standard only allows First In First Out (FIFO) and weighted average cost.
Deferred taxation is an area that used to cause problems for companies using IFRS that were registered with the SEC when reconciling their profits to US GAAP. Although both sets of standards apply the basic principle of recognizing deferred tax on any difference between the carrying value of an asset and its tax value, they both have complex exceptions that result in their giving different results for the same situation. US rules, of course, reflect US tax requirements, where IAS 12 has to stand outside any legal framework.
The IASB and FASB have made heroic attempts to converge their tax standards but the outcome has been just the consumption of a lot of staff and board time with no progress. One area where they differ is in the recognition of future tax rates. IAS 12 says you reflect future rates when they become reasonably certain, whereas in the US you only recognize ...