Essay Differences Between Gaap and Ifrs

Words: 1785
Pages: 8
Open Document
Differences Between GAAP and IFRS
The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) are working together to eliminate a variety of difference between the United States generally accepted accounting procedures (U.S. GAAP or GAAP) and International Financial Reporting Standards (IFRS). This convergence project grew out of an agreement reached by the two boards in 2002 (Deloitte, 2004).
On February 24, the SEC unanimously agreed to publish a statement of continued support for a single set of high-quality global accounting standards. The SEC acknowledged that IFRS is best positioned to be the global standard. Even without a set conversion timeline from the SEC, IFRS has been affecting …show more content…
It is possible that a benefit arrangement that is classified as a defined benefit plan under GAAP may be classified as a defined contributions plan under IFRS and vise versa. Classification differences would result in changes to the expense recognition model as well as to the balance sheet presentation. Both the FASB and the IASB have major projects on their agendas on accounting for pension and other postemployment benefits, which may result in greater convergence in the future (Deloitte, 2004).
The guidance under GAAP and IFRS as it relates to nonfinancial assets (e.g., intangibles; property, plant equipment, including leased assets; inventory; and investment property) contains some significant differences with potentially far-reaching implications. IFRS permits the revaluation of certain nonfinancial assets to fair value, whereas GAAP does not. The recognition and measurement of intangible assets could different significantly under IFRS. With limited exceptions, GAAP prohibits the capitalization of development costs, whereas under IFRS they can be capitalized if certain criteria are met. Even where GAAP allows for capitalization of development costs (e.g., software development costs), differences exist. GAAP provides guidance depending on whether or not the software is for internal use or for sale. The principles surrounding capitalization under IFRA are the same whether the internally generated intangible is being developed for internal use or for sale.
In
Show More

Related Documents: Essay Differences Between Gaap and Ifrs

TireeCherise ACC290 IFRS v GAAP Essay

IFRS vs. GAAP Tiree-Cherise Ealey ACC 290 April 6th 2015 Gary Foote Accounting is an important feature in every business worldwide. Essentially, it is necessary in order to keep track of the economic events that occur within a business. These records are used within a company, however they are also used for other purposes, one of them being to report their financial activities. For this to be effective, there must be standards that businesses to adhere to in order to make financial reporting…

Words 1548 - Pages 7

Essay about Similarities and Differences. a Comparison of Ifrs and Us Gaap

Similarities and Differences A comparison of IFRS and US GAAP October 2007 PricewaterhouseCoopers’ IFRS and corporate governance publications and tools 2007 IFRS technical publications IFRS Manual of Accounting 2008 Provides expert practical guidance on how groups should prepare their consolidated financial statements in accordance with IFRS. Comprehensive publication including hundreds of worked examples, extracts from company reports and model financial statements. IFRS News Monthly newsletter…

Words 33240 - Pages 133

Differences Of International Accounting Standards: IFRS Vs. GAAP

Differences of International Accounting Standards: IFRS vs. GAAP Dean Wilhelm ACC/291 09/08/2014 Professor Cameo Christopher Differences of International Accounting Standards: IFRS vs. GAAP The recent financial crisis and the globalization of the world’s economy has brought an increased need for a single standard of financial reporting. According to Kimmel (2013), over “115 countries have adopted the International Financial Reporting Standards (IFRS) developed by the International…

Words 869 - Pages 4

Compare IFRS And GAAP Essay

Compare IFRS and GAAP Anne E Risley ACC 290 Oct 27, 2014 Jammie Janis Ifrs Versus Gaap International Financial Reporting Standards vs. Generally Accepted Accounting Principals Over the last decade, the world has become increasingly connected. Businesses are embracing opportunities abroad and gathering investors from a progressively growing international market. Globalization has given rise to a number of questions regarding multicultural business practice. It has also created a need for universal…

Words 1158 - Pages 5

Moodle 1 Assignment 1 Essay

McDaniel GAAP (US Generally Accepted Accounting Principles) is the accounting standard used in the US, while IFRS (International Financial Reporting Standards) is the accounting standard used in over 110 countries around the world. GAAP is considered a more “rules based” system of accounting, while IFRS is more “principles based.” The International Financial Reporting Standards (IFRS) - the accounting standard used in more than 110 countries - has some key differences from the U.S. Generally…

Words 717 - Pages 3

Going Global Essay

Going Global: Implementing IAS/IFRS Biana Moloksher Western Governor’s University Table of Contents Cover Page………………………………………………………………………………Page 1 Table of Contents………………………………………………………………………..Page 2 Executive Summary……………………………………………………………………..Page 3 Shifting Toward IAS…..………………………………………………………………..Page 3 Research Findings………………………………………………………………………Page 4 Inventory Costing…………………………………………………………………..Page 4 Recovering Value………....…………………………………………………………

Words 2080 - Pages 9

Globalization Of Law

Applied Accounting Principles, also known as U.S. GAAP. Outside of the United States in other countries and markets, accountants are required to follow International Financial Reporting Standards, also known as IFRS, for when they report on their company. Due to globalization, these two sets of laws or standards are beginning to clash more obviously because the global markets include companies from all different parts of the world. The differences in these two sets of standards is becoming more obvious…

Words 2532 - Pages 11

IFRS - Accounting Essay example

Subject: IFRS Adoption This memo is in response to management questions concerning the possible International Financial Reporting Standards (IFRS) adoption in the United States and its implications to the company in the next couple of years. Currently US companies that are required to report to the SEC are required to report in US GAAP. However, international public companies that sell securities in the US can report in IFRS, and are not required to provide formal reconciliation between IFRS and…

Words 784 - Pages 4

Revaluation Assets Essay

There are still many differences in accounting treatment between International financial reporting standards (IFRS) and the U.S Generally Accepted Accounting Principles (GAAP). While IFRS are widely used by many countries around the world, FASB of the U.S still working on the intention of either adopt the IFRS or converge towards it. Until the convergence actually happens, there are still many critics about the accounting treatment at the same subject under U.S GAAP and IFRS. Example of this is the…

Words 1701 - Pages 7

Essay on International Financial Reporting Standards

the date that International Financial Reporting Standards (IFRS) will replace Canadian generally accepted accounting principles (Canadian GAAP) for all Canadian publicly traded companies as well as for non-listed financial institutions, securities dealers and many cooperative enterprises that qualify as “publicly accountable enterprises.” Canadian private enterprises will be permitted, but not required, to adopt IFRS. The adoption of IFRS, which is the collection of financial reporting standards developed…

Words 1824 - Pages 8