swiss gaap fer vs. ifrs overview of main differences

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Audit.Tax.Consulting.Corporate Finance.

Swiss GAAP FER vs. IFRSOverview of main differences

IFMA Lunch meeting – 11 February 2014Hôtel d’Angleterre, Genève


IntroductionAccounting standards in the spotlight

Swiss GAAP FER vs. IFRS – IFMA presentation2


Budget of over CHF 40 millions

+125 employees

IntroductionIFRS vs. Swiss GAAP FER: An equal fight?

3

IFRS Foundation

Around 30 members

+ budget of CHF 100 000

Swiss GAAP RPC

Swiss GAAP FER vs. IFRS – IFMA presentation


Introduction

4

Examples of companies applying IFRS and Swiss GAAP FER

IFRS Swiss GAAP RPC



IntroductionRecent developments in Switzerland

5

Since 2013:• Swatch Group• Georg Fischer• Bachem Holding• Meyer Burger



Swiss GAAP FER vs. IFRSOverview of main differences

6

Constant evolution Stability

Principle based Principle based

International recognition National recognition

Accepted by SIX Swiss Exchange

(all indices)

Accepted by SIX Swiss Exchange

(Domestic index only)

IFRS Swiss GAAP FER



Swiss GAAP FER vs. IFRSEmployee benefits

7

• Defined benefit or defined contribution plan

• Concept of matching cost and revenue

• Actuarial valuation required for defined benefitplans

• 2013: application of IAS 19 revised and itsimpact on key financial indicators for a majorityof companies

• Extensive information to disclose in the notes tothe financial statements on the differentassumptions followed and sensitivity analysis

• No distinction based on the type of plans

• Economic effects are determined based on thefinancial situation of the pension fund

• Disclosures required remain limited

IFRS Swiss GAAP FER



Swiss GAAP FER vs. IFRSGoodwill

8

• Goodwill is considered as an intangible assetwith indefinite useful life

• Goodwill is not amortised and is subject to ayearly impairment test

• Negative goodwill is presumed to beimprobable and must be recognised in thestatement of income

• Information to be disclosed in the notes relatingto assumptions used when performingimpairment test

• Based on IFRS 3R, acquisition costs should berecorded directly in the income statement

• 2 accounting treatments are accepted underSwiss GAAP FER

Option 1 : goodwill is accounted for as anintangible asset and has to be amortisedover 5 years (possibility to extend to 20years)

Option 2 : goodwill is accounted for as adiminution of equity at the date of acquisition

• The case of negative goodwill is not explicitlymentioned. Accounting treatment followed willhave to be disclosed in the notes

• Acquisition costs are included in the acquisitionprice

IFRS Swiss GAAP FER



Swiss GAAP FER vs. IFRSIntangible assets

9

• Intangible assets acquired externally arecapitalised if they meet the criteria of an asset

• Development costs must be capitalised ifspecific conditions are met

• Amortisation is performed over the economicuseful life

• No amortisation for intangible assets with anindefinite useful life. Impairment test has to beperformed every year

• Intangible assets acquired externally arecapitalised if they meet the criteria of an asset

• Development costs can be capitalised if theymeet specific criteria

• Amortisation is performed over the economicuseful life

• Intangibles with an indefinite useful life areamortised over 5 years, with a possibility toextend to 20 years if appropriate

IFRS Swiss GAAP FER



Swiss GAAP FER vs. IFRSFinancial instruments – hedge accounting

10

• IAS 39 defines 4 categories of financialinstruments

• Very detailed information on the application ofhedge accounting

• Conditions for application of hedge accountingare very restrictive

• Efficiency tests must be performed bothprospectively and retrospectively

• IFRS 7 requires detailed information to bedisclosed in the notes on risk exposure and riskmanagement

• 6 categories of financial instruments exist asper Swiss GAAP FER

• Hedge accounting is accepted

• No specific information on the type of risk thatcan be hedged nor on the hedging instrumentthat can be used

• No requirement for efficiency tests

• Limited disclosures required

IFRS Swiss GAAP FER



Swiss GAAP FER vs. IFRSPresentation of the financial statements

11

• Detailed information required to be disclosedfor most of the accounting topics

• Information to be disclosed in the notes to thefinancial statements can be found either in thestandard dedicated to the presentation (IAS 1)or in other specific standards

• The concept of extraordinary income does notexist

• The statement of income must be completed bythe statement of other comprehensive income(OCI)

• Extensive information is required for listedcompanies (segment information for example)

• Limited information to be disclosed in the notesto the financial statements as per Swiss GAAPFER

• The statement of income must me splitbetween income from operations, nonoperating income and extraordinary income

• The concept of Other Comprehensive Incomedoes not exist

• Published in 2013, RPC 31 includes additionalinformation to be disclosed for listedcompanies (first application, share basedpayments, segment information, interimreporting…)

IFRS Swiss GAAP FER



Swiss GAAP FER vs. IFRSConclusion

12

• True and fair view principle

• Targeted companies: small tomedium size companies with limitedcomplexity

• Accounting standards are simpleand pragmatic

• Stability of the standards

• Limited disclosures requirements

• National recognition

• True and fair view principle

• Targeted companies:international companies of acertain size and complexity

• Detailed guidance requiringspecific accounting treatment

• Standards in constant evolution

• Detailed information required

• International recognition

IFRS Swiss GAAP FER



Contact

Joelle HerbetteDirectorAudit & [email protected]+41 (0)58 279 8146

13 Swiss GAAP FER vs. IFRS – IFMA presentation

mailto:[email protected]


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swiss gaap fer vs. ifrs overview of main differences

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