ACC 7030 Module 1 Written Assignment: IFRS Update and Convergence With U.S. GAAP Example

Reviewed by Edgar Pennington, MBA Thomas Edison State University Updated October 2026

This ACC 7030 Module 1 example answers a written assignment on the IFRS update for Emerging Issues in Accounting in TESU's MBA in Accounting. ACC-7030 opens with the relationship between International Financial Reporting Standards and U.S. GAAP, using Bragg's IFRS Guidebook alongside Jackson's Detecting Accounting Fraud. The paper follows Lenape Medical, a composite Princeton, New Jersey, maker of surgical instruments recently acquired by a German group that reports under IFRS. It contrasts the two frameworks' philosophies, traces the convergence projects and why they stopped short, restates Lenape's inventory, development costs and leases under IFRS and checks whether its revenue recognition needs to change under the largely converged standards.

CourseACC-7030 Emerging Issues in Accounting
ModuleModule 1
Paper typeModule 1 written assignment: IFRS update
LengthAbout 711 words, 5 pages
FormatAPA 7 student paper
SchoolThomas Edison State University
ProgramMBA in Accounting
UpdatedOctober 2026

Free sample paper for ACC 7030 Module 1

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From U.S. GAAP to IFRS: Restating a Medical Device Maker for Its New European Parent

Student Name

MBA in Accounting, Thomas Edison State University

ACC-7030: Emerging Issues in Accounting

Mentor Name

Month Day, Year

What this page is doingThe title names the conversion the assignment performs and the reason it is needed, a European parent that reports under IFRS.
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From U.S. GAAP to IFRS: Restating a Medical Device Maker for Its New European Parent

Introduction

More than 140 jurisdictions require or allow the International Accounting Standards Board's IFRS, while U.S. public companies follow U.S. GAAP from the Financial Accounting Standards Board. IFRS is usually described as principles-based, relying on broad objectives and professional judgment, and U.S. GAAP as rules-based, with detailed guidance, bright lines and industry exceptions (Bragg, 2016). The distinction is one of degree, but it shapes how each framework handles new transactions.

Part A: Convergence and Its Limits

In the 2002 Norwalk Agreement, the two boards committed to making their standards compatible. In 2007 the SEC allowed foreign private issuers to file IFRS statements without reconciliation to U.S. GAAP, and in 2008 it proposed a roadmap toward IFRS for U.S. companies, which it later set aside. The joint projects produced a converged revenue standard, IFRS 15 and ASC 606, and lease standards that share a balance sheet model but differ in expense recognition. Other projects, such as financial instrument impairment, ended with different answers. Today convergence is better described as maintained comparability than as a path to adoption. Barth et al. (2008) reported less smoothing and quicker loss recognition among firms using international standards than among matched local-standard firms, suggesting principles need not cost quality, though later work stresses that enforcement matters as much.

Part B: Restating Lenape's Key Balances

The inventory change is the largest. Because the IRS requires LIFO users to use LIFO for financial reporting, Lenape will keep LIFO in its separate U.S. statements and tax return and restate to FIFO only for consolidation, tracking the difference as a reporting adjustment.

For the group's consolidated statements, the restatement also changes ratios lenders and analysts use. Higher inventory raises the current ratio, capitalized development costs raise assets and lower current expenses and the lease change increases EBITDA. The German parent should explain these effects to Lenape's U.S. lenders so that covenant tests remain based on the agreed U.S. GAAP figures.

AreaU.S. GAAP treatment at LenapeIFRS treatmentEffect of restatement
InventoryLIFO, $60 million; FIFO would be $72 millionLIFO prohibited; FIFO or weighted averageInventory up $12 million; equity up $9 million after 25 percent deferred tax
Inventory write-downsCannot be reversedReversed if value recovers$0.8 million write-down from 2023 reversed
Development costsExpensed as incurredCapitalized once technical feasibility and other IAS 38 criteria are met$8 million of 2024 spending on a launched device capitalized and amortized over five years
Operating leasesSingle straight-line lease cost, $5.0 million a yearDepreciation plus interest, higher early in the leaseFirst-year expense $5.7 million, but EBITDA higher by $5.0 million, since no lease cost sits in operating expense
Impairment of equipmentTwo-step test, recoverability firstOne-step test against recoverable amountNo impairment under either at present
What this page is doingShowing that EBITDA rises under IFRS while total lease expense also rises in the first year explains why lenders' covenants must be redefined after the conversion.
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Part C: Revenue Recognition After Convergence

Both frameworks use the same five steps: identify the contract, identify performance obligations, determine the transaction price, allocate it and recognize revenue as obligations are satisfied. Lenape sells instruments with a two-year service plan and recognizes the plan's share of the price over time under both standards. A few differences remain. The collectibility threshold uses the word probable in both, but probable means likely to occur under U.S. GAAP and more likely than not under IFRS, so IFRS can recognize contracts with somewhat greater credit risk. U.S. GAAP offers practical expedients that IFRS does not, such as treating shipping after control transfers as a fulfillment cost. For Lenape, these differences do not change current revenue, but the controller should document the collectibility judgment for hospital customers in financial difficulty.

Part D: Principles, Rules and Judgment

For Lenape's accountants, the move to IFRS means more judgment and more documentation. Capitalizing development costs requires evidence of technical feasibility, intent and ability to complete, probable future benefits and reliable measurement, and those judgments can be used to manage earnings, the subject of Module 2. Jackson (2015) notes that flexibility in standards gives managers room for discretion that auditors must test. The group should adopt written policies for each IFRS judgment, such as the point at which a development project meets the IAS 38 criteria, so that similar projects are treated alike across the group.

References

Barth, M. E., Landsman, W. R., & Lang, M. H. (2008). International accounting standards and accounting quality. Journal of Accounting Research, 46(3), 467-498. https://doi.org/10.1111/j.1475-679X.2008.00287.x

Bragg, S. M. (2016). IFRS guidebook: 2017 edition. AccountingTools.

Jackson, C. W. (2015). Detecting accounting fraud: Analysis and ethics. Pearson.

ACC 7030 Module 1 instructions, in plain terms

ACC-7030's grade leans on its final project, two case studies picked from four, at 40 percent; across the four modules, six written assignments count 30, six forums 20 and the live Edison sessions 10. The Module 1 written assignment covers the IFRS update: the move from rules-based to principles-based standards, the evolution of IFRS and convergence issues and changes in revenue recognition. Expect questions that compare treatments, restate balances or evaluate the case for U.S. adoption. Lenape Medical is a composite company. Expect to compare treatments in a table and to quantify the effect of switching frameworks on a company's statements. Some versions ask you to evaluate the case for U.S. adoption.

How the ACC 7030 Module 1 example is put together

The introduction contrasts the two frameworks and their philosophies. Part A traces convergence from the Norwalk Agreement through the SEC's decisions to today, with evidence on accounting quality under international standards. Part B restates five areas in a table with dollar effects and explains why LIFO is kept for U.S. tax purposes. Part C walks through the converged revenue model and the differences that remain. Part D connects principles-based judgment to the risk of earnings management and recommends written policies. The restatement table quantifies each difference, so the reader sees which ones matter for this company and which are minor. The conclusion recommends written policies for IFRS judgments.

Where the marks sit in the ACC 7030 Module 1 rubric

The IFRS assignment earns up to 5 points toward the final grade. Mentors check accurate statements of IFRS and U.S. GAAP treatments, a correct account of convergence, computations of restatement effects and critical analysis of principles-based standards. Current knowledge, such as the status of convergence and remaining revenue differences, shows research. Tables comparing treatments and citations to standards and the texts complete the grade. Mentors reward answers that state the current status of convergence accurately, quantify the effect of each difference on the company and explain the judgment that principles-based standards require, with written policies to keep it consistent. Explaining the effect of the restatement on ratios and covenants shows the practical consequences of the conversion.

ACC 7030 Module 1 help from the desk

IFRS answers lose points for describing convergence as complete, treating revenue recognition as identical in every detail and listing differences without effects. State where the standards now agree and where they still differ. Quantify the effect of each difference on the company in question. Check the most recent IFRS and FASB updates before writing, since some differences have narrowed. For each difference, give the effect on a specific line of the statements. Keep tax and financial reporting effects separate. Put a dollar figure on each difference for the case company. A free first sample of your own ACC-7030 Module 1 assignment is available on request.

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ACC 7030 Module 1 questions, answered

Where can I find a free ACC 7030 Module 1 sample paper?

The medical device maker's IFRS conversion appears above: convergence history, restated inventory, development costs and leases, and remaining revenue differences.

Is LIFO allowed under IFRS?

No. IFRS permits FIFO or weighted average cost but prohibits LIFO.

Are IFRS 15 and ASC 606 the same?

They share the five-step model but differ in details such as the collectibility threshold and some practical expedients.

How do development costs differ under IFRS?

IFRS requires capitalization once IAS 38 criteria such as technical feasibility are met; U.S. GAAP generally expenses them.

Why did the United States not adopt IFRS?

The SEC set aside its roadmap amid concerns about cost, the loss of U.S. standard-setting control and differences in enforcement.