Where are the IFRS are significantly different from current Canadian GAAP - Research Paper Example

This demanded a certain degree of similarity in the accounting standers and many international accounting bodies come up which assisted development of Generally Accepted Accounting Principles (GAAP). The aim of GAAP is provide rules related to preparation, presentation and reporting of financial statements. GAAP is combination of all the Accounting Frame works, Accounting Laws, Accounting Rules and Accounting frame works. At present Financial Accounting Standards Board (FASB) has the highest authority to establish GAAP which has to be followed by public and private organization.

In US, the financial reporting is controlled by Financial Accounting Standards Advisory Board (FASAB). These GAAP brings standards which help Stakeholders to understand present condition of the company, and on the basis of their analysis they make decisions related to credit, investment and other vital financial decisions. But it has been found that the GAAP suffers with certain limitations, like inter industrial comparison is not possible if GAAP is taken into consideration for financial statement reporting, also certain vital information related to the companys performance are not presented on the financial statement sheet while following GAAP, which are necessary for the merger and acquisition process.

So to overcome these hindrances, concept of International Financial Reporting Standers (IFRS) came into existence. IFRS consist of standards, interpretations, and frame works which are to be taken into consideration while preparing and presenting financial statement of a company as adopted by International Accounting Standards Board (IASB). Actually, IFRS is the rename of International Accounting Standers (IAS) which was proposed from 1973 to 2001 by Board of International Accounting Standards Committee (IASC).

In the historical event of April 1,