GAAP metrics conversion: I need to know how to convert GAAP metric to US GAAP for Toal assets

Case 4-1

Jaguar Land Rover PLC

Jaguar Land Rover Automotive PLC (JLR) is a maker of luxury autos based in Coventry, United Kingdom. JLR uses IFRS and has a fiscal year-end of March 31. You have been asked to use your knowledge of IFRS to convert key metrics for the company to a U.S. GAAP basis. For simplicity, you may assume that the only material differences between JLRs as-reported numbers and those it would report under U.S. GAAP are traceable to its policy of capitalizing development costs.

Internally Generated Intangible Assets (from Footnote 2, Accounting Policies)

Research costs are charged to the consolidated income statement in the year in which they are incurred.

Product development costs incurred on new vehicle platforms, engines, transmission and new products are recognised as intangible assetswhen feasibility has been established, the Group has committed technical, financial and other resources to complete the development and it is probable that the asset will generate future economic benefits.

The costs capitalised include the cost of materials, direct labour and directly attributable overhead expenditure incurred up to the date the asset is available for use.

Interest cost incurred is capitalised up to the date the asset is ready for its intended use, based on borrowings incurred specifically for financing the asset or the weighted average rate of all other borrowings, if no specific borrowings have been incurred for the asset.

Product development cost is amortised over a period of between two and ten years.

Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated impairment loss, if any.

Amortisation is not recorded on product development in progress until development is complete.

Research and Development (from Footnote 11)

Year ended 31 March

2017 ( millions)

Total research and development costs incurred

1,794

Research and development expensed

(368)

Development costs capitalized

1,426

page 154

Intangible Assets (selections from Footnote 18)

Cost

Product Development in Progress ( millions)

Capitalized Product Development ( millions)

Balance at 31 March 2016

1,539

4,525

Additionsinternally developed

1,426

Transfers

(809)

809

Disposals

(138)

Balance at 31 March 2017

2,156

5,196

Amortization

Balance at 31 March 2016

1,635

Amortization for the year

769

Disposals

(138)

Balance at 31 March 2017

2,266

Net book value at 31 March 2017

2,156

2,930

	As reported (IFRS) ( Million)	U.S GAAP
Profit before tax	1,610	953
Net profit (after tax)	1,272	754
Total assets	10,962
Shareholders equity	6,581	2,568
Operating cash flow	3,160	1,734