Nobody downloaded yet

IFRS .IFRS and US GAAP Comparison - Essay Example

Comments (0) Cite this document
Summary
U.S GAAP (Generally Accepted Accounting Principles) is practiced only in the United States while IFRS (International Financial Reporting Standards) are adopted by the International Accounting Standards Board (IASB). There are notable differences between IFRS income statement and…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER93.9% of users find it useful
IFRS .IFRS and US GAAP Comparison
Read TextPreview

Extract of sample
"IFRS .IFRS and US GAAP Comparison"

Download file to see previous pages Firstly, income statement captions are not required in the case of US GAAP while IFRS prescribes minimum caption in income statement. In addition, the US GAAP treatment allows either single step or multiple steps format for income statement captions. According to the US GAAP treatment, classification of extraordinary items is permitted under certain circumstances and it can also be segregated within operating income; in contrast, IFRS bans classification of unusual items although it permits segregation of such items (Deloitte). The US GAAP provides a broader definition for discontinued operations while IFRS sets a narrow definition. Under US GAAP, restructuring costs are recognized only when it becomes necessary but IFRS recognizes restructuring costs when it is announced.
Limited guidance on offsetting of assets and liabilities is a characteristic feature of US GAAP; however, IFRS insists specific guidance on offsetting of assets and liabilities. In case of IFRS, financial position’s classified statement is essential unless liquidity ordering is more meaningful. In contrast, such a statement is not required under US GAAP. Exclusion of long-term debt from current liabilities is a specific feature of IFRS. The US GAAP treatment refinances the exclusion of long term debt. The IFRS treatment states the minority interests as a component of equity while US GAAP guidelines restrict the presentation of minority interests as equity (“IFRSs and US GAAP….”). As per the US GAAP balance sheet format, entries are presented as total assets balancing to total liabilities in addition to shareholders’ equity. In contrast, IFRS entries include current and non-current assets and current and non-current liabilities. While US GAAP presents items on the basis of decreasing order of liquidity, the IFRS presents the items in the increasing order.
“IFRSs and US GAAP: A pocket comparison.” An IAS plus Guide: Audit, Tax, Consulting and Financial ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“IFRS .IFRS and US GAAP Comparison Essay Example | Topics and Well Written Essays - 250 words”, n.d.)
IFRS .IFRS and US GAAP Comparison Essay Example | Topics and Well Written Essays - 250 words. Retrieved from https://studentshare.org/finance-accounting/1581749-ifrs-ifrs-and-us-gaap-comparison
(IFRS .IFRS and US GAAP Comparison Essay Example | Topics and Well Written Essays - 250 Words)
IFRS .IFRS and US GAAP Comparison Essay Example | Topics and Well Written Essays - 250 Words. https://studentshare.org/finance-accounting/1581749-ifrs-ifrs-and-us-gaap-comparison.
“IFRS .IFRS and US GAAP Comparison Essay Example | Topics and Well Written Essays - 250 Words”, n.d. https://studentshare.org/finance-accounting/1581749-ifrs-ifrs-and-us-gaap-comparison.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
US GAAP IFRS Convergence
...?US GAAPIFRS Convergence Introduction Over the past 15 years, many accounting controversies and scandals have caused financial turmoil and resulted in the bankruptcy of several major firms. In response to these events, the IASB (International Accounting Standards Board) began developing the IFRS (International Financial Reporting Standards) to provide transparency and comparability for investors across the world. Today, more than 113 countries have adopted the IFRS or are in the process of converging to the standard (Nobes and Parker, 2010). While countries such as Canada adopted the IFRS as early as 2011, the United States has...
9 Pages(2250 words)Essay
IFRS and GAAP Convergence
...-common principles in other regions, particularly where losses have been recognized timely. 4.0 Comparison of the Differences in the Financial Statements with IFRS and GAAP The main distinction between GAAP and IFRS standards in the United States is in the fact that IFRS allows three significant concepts in the financial statements and capital maintenance while the standards set under GAAP permits capital and capital maintenance during periods of deflation and low inflation besides substantial capital maintenance and financial capital maintenance in ostensible fiscal units (as stated under the historical cost accounting...
6 Pages(1500 words)Research Paper
IFRS and GAAP Convergence
...of the IFRS and the US GAAP, as according to the work plan of the SEC it will take another four to five years for complete convergence. Impact of the Convergence Impact of the convergence differs from companies to companies. It mainly depends upon the nature of the business. It is evident that the number of users of financial reporting is quite higher for the public companies in comparison to the private companies. Hence, impact of convergence on public companies will be higher as well. Several elements exist in the financial statements of the public companies and therefore, a few expertises are required to interpret the data. At the same time, level of difficulty is...
4 Pages(1000 words)Term Paper
Account standardization, IFRS and US GAAP
...?Financial Accounting Introduction Account standardization, IFRS and US GAAP Accounting refers to the systematic way of summarizing, analyzing and reporting the financial transactions. Accounting helps in clearly understanding the financial position of the organization and comparing it with other organizations within a particular financial period. The general purpose of the financial statement is to be prepared in accordance with the international accounting standards. The need of the accounting standards emerges because auditors and financial analyst are generally confronted with problems of accounting like biasedness, misinterpretation, inaccuracy and ambiguity. To minimize these kinds of errors a set of accounting standards... Accounting...
9 Pages(2250 words)Essay
IFRS and GAAP Convergence
...? IFRS and GAAP Convergence Table of Contents Introduction 3 Accounting Convergence 3 Difference between U.S. GAAP and IFRS 4 Main Obstacle to Convergence 5 Impact on Balance Sheet and Income Statement Presentation Method 5 Most significant Affect of Convergence 6 Conclusion 6 Reference 7 Introduction In the corporate finance world, some events have shown the importance of accurate financial reporting by businesses. The main objective of financial reporting is to communicate to investors, creditors, and other interested parties the financial outcomes of a business in a understandable and useful way. The basic responsibility for reporting those financial outcomes rests with the business’s management. When the financial statements... and in...
4 Pages(1000 words)Essay
GAAP VS IFRS
...?   GAAP VS IFRSGAAP VS IFRS Question It is essential for a company to convert from GAAP to IFRS. A company can submit its financial statements on an identical basis as its foreign opponents by adopting IFRS, making comparison less complicated. In addition, organizations with subsidiaries in areas that permit or need IFRS may have the capacity to utilize a single accounting language in the company. Also, companies may need to convert from GAAP to IFRS if they are a subsidiary of an international organization that should employ...
3 Pages(750 words)Essay
Comparison of IFRS and US GAAP
...explorative information on the IFRS / US GAAP and also some demarcation and comparison of the two standards of financial reporting. More specifically, the purpose of the current study is to investigate the properties of IFRS versus US GAAP standards of accounting using the accounts of National Grid Plc that is listed both in EU and US Stock Exchange. And most importantly, the paper identifies the difference between the rules and principles of two accounting standards through the accounts of National Grid Plc and its usefulness to various stakeholders of the...
10 Pages(2500 words)Essay
IFRS and GAAP Convergence
.... Preparation of cash flow statements The method of preparation of cash flow statement prescribed by the IFRS is very similar to that of US GAAP and both the standards adhere to the direct and indirect approaches for the preparation of the statement with minor differences that of classifications of the cash and cash equivalents. Works Cited Convergence Is Coming: How Your CPA Firm Should Prepare . (n.d.). Retrieved November 30, 2011, from Accountants World: http://www.accountantsworld.com/DesktopDefault.aspx?page=articles&faid=665&category=story&kw= PricewaterhouseCoopers. (2007). A comparison of IFRS and US GAAP....
3 Pages(750 words)Essay
U.S. GAAP vs. IFRS
...of receivables in IFRS occurs using an appropriate discount rate for all future receipts. Under GAAP, the discounting receivables occurs under limited conditions. Under IFRS, classification of financial assets is done into several categories, while for GAAP, it occurs in several pronouncements (King, 2008). In this classification, IFRS bases it on the nature of instrument while GAAP on the nature of legality. A comparative financial statement must be presented under IFRS comparing the current period with the previous one. However, in GAAP, the comparative statement must not compare the...
2 Pages(500 words)Research Paper
GAAP versus IFRS
...and eliminate the necessity to adjust LIFO inventories in comparison analysis for analysts (Haris, 2013). Three Problems that US Corporation faces while converting their standards from GAAP to IFRS and its solutions: Elena (2009) stated that one of the main problems faced by US corporations while converting their accounting standards from GAAP to IFRS is that it requires significant cost for adopting IFRS but it is not difficult for multinational corporations. However for small and medium enterprises, for non- profit organizations, agricultural enterprises and government bodies may face challenges in...
4 Pages(1000 words)Research Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Let us find you another Essay on topic IFRS .IFRS and US GAAP Comparison for FREE!
Contact Us