Full Answer Section

2. • • IFRS (Samsung): Often presents assets and liabilities in order of non-liquidity, meaning non-current assets (e.g., Intangible Assets, Property, Plant, and Equipment) are usually listed before current assets. Similarly, non-current liabilities (e.g., long-term debt) typically precede current liabilities. This presentation emphasizes the long-term investment and financing structure of the company.
     • Contrast: The primary difference lies in the ordering convention of assets and liabilities. A quick review would show Apple’s balance sheet starting with readily convertible assets, while Samsung’s might begin with assets used for long-term operations.
   • Income Statement Presentation (Statement of Comprehensive Income):
     • US GAAP (Apple): Often presents expenses by function (e.g., Cost of Sales, Research and Development, Selling, General, and Administrative expenses). This provides a clear picture of expenses incurred for specific operational activities. US GAAP also separates Net Income from Other Comprehensive Income (OCI), which includes items like unrealized gains/losses on certain investments or foreign currency translation adjustments, often presenting OCI after Net Income or in a separate statement.
     • IFRS (Samsung): While allowing for functional presentation, IFRS also frequently presents expenses by nature (e.g., salaries, depreciation, raw material costs, advertising costs). If expenses are presented by function, IFRS requires separate disclosure of expenses by nature in the notes. IFRS also integrates OCI directly into the Statement of Comprehensive Income, presenting it as part of a single statement that culminates in “Total Comprehensive Income.”
     • Contrast: The main distinction is in the typical expense classification (function vs. nature emphasis) and the more integrated display of Other Comprehensive Income within the primary income statement under IFRS, providing a holistic view of all non-owner changes in equity.
   • Inventory Valuation:
     • US GAAP (Apple): Permits the use of the Last-In, First-Out (LIFO) method for inventory valuation, in addition to FIFO (First-In, First-Out) and Weighted-Average. LIFO assumes that the last units purchased are the first ones sold, which can result in a lower reported cost of goods sold (and thus higher reported profit) during periods of declining costs, or a higher cost of goods sold (lower profit) during inflationary periods.
     • IFRS (Samsung): Prohibits the use of the LIFO method for inventory valuation. Companies must use either the FIFO method or the Weighted-Average method. FIFO assumes that the first units purchased are the first ones sold, generally reflecting the actual physical flow for many tech products.
     • Contrast: This is a significant difference impacting the reported Cost of Goods Sold and Inventory values on the balance sheet. For consumer electronics, which often see rapid technological advancements and fluctuating component prices, the choice of inventory method can materially affect reported profitability and asset valuation.

3. Easiest to Understand and Most Accurate Cost Data as a Manager:

   As a manager, I would find IFRS financial statements (Samsung) to be generally easier to understand for global comparison and to potentially provide more accurate cost data, particularly concerning inventory.