The Target Corporation, NYSE symbol TGT, had revenues in 2015 of $72,618 million. In order for Target to transition from General Accepted Accounting Principles (GAAP) to the International Financial Reporting Standards they will first have to follow the IFRS 1, which is the First Time Adoption of International Financial Reporting Standards. The IFRS 1 is the structure pertinent to those implementing IFRS for the first time (Gornik-Tomaszewski & Sellhorn, 2010). In order to transition from GAAP to IFRS companies need to undertake three steps. Those steps include 1) Selecting an accounting practice that is in compliance with IFRS, 2) Prepare an initial IFRS statement of fiscal position, using the date of transition to IFRS as starting date, and 3) Present and disclose their first set of IFRS financial reports along with an rationalization of the conversion from GAAP to IFRS (Gornik-Tomaszewski & Sellhorn,2010). In the opening IFRS statement, first time adopters will need to 1) recognize all assets and liabilities as required by IFRS, 2) not recognize those assets and liabilities that IFRS does not …show more content…
There are essential common concepts between GAAP and IFRS including both require parent companies to consolidate financial statements that include subsidiary companies, in the consolidated financial statements the parent company has to report 100% of subsidiaries assets, liabilities, revenue, expenses, gains and losses and the parent company is in control as long as it assumes more than 50% possession of outstanding common stock (James, 2010). Also, both require that goodwill be identified on the combined financial statements if the procurement cost surpasses the fair market value of the subsidiaries recognizable assets and goodwill is remunerated (James,