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¶ … IFRS and GAAP
While there is a global movement towards convergence of accounting standards with more countries adopting IFRS, and many companies in areas where IFRS is not mandatory choosing to adopt the standards (Hillman, Heaston, & Dodd, 2012). However, while there are many similarities between IFRS and U.S. GAAP, there are also differences, some of which have only a minimal impact, other differences are more fundamental in nature. When looking at some of the differences, it becomes apparent that while IFRS adopts a principles based approach, GAAP has more prescriptive requirements (Ernst & Young, 2013) The two frameworks both place a high level of emphasis on faithful representation and relevancy of information. However, there are some differences. For example, GAAP still incorporate the concept of conservativism, a concept which has now been omitted from the IFRS framework as the organisation is linked towards a greater level of emphasis on relevancy, transparency, and adoption of measures to encourage fair market value (Macve, 2015). The IFRS approach pays specific attention to the level of relevancy between different countries, whereas the GAAP is focused only on the U.S. environment,
IFRS 2-1 the fundamental foundations of IFRS dealing with presentation of the balance sheet which reflects the position of a firm have some differences. Under IFRS firms do not have to follow any specific order for listing the items on the sheet, although there is a recommendation that reporting of assets may be better presented in reverse order of liquidity. Under GAAP there is a more specific requirement, with the standard stating that the government should be presented ranked based on their liquidity; assets such as cash which are most liquid honest first, moving down through the level of liquidity (Pwc, 2015). In addition, the equity of the shareholders is the last item to be reported on the balance sheet.
IFRS 2-2 objectives of financial accounting are more similar than different, dealing with the conceptual frameworks of
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IFRS 2-3 the use of the term use the term 'financial position' to mean the balance sheet which is found in GAAP, as the statement shows the 'current' position of the firm (at the time the accounts were prepared), and rather than use the term common stock, which is found in GAAP, the term ordinary share capital is used.
IFRS 3-1 has m arerms, as it increases the requirements placed on publicly traded firms, any issues that…
References
Ampofo, A. A., & Sellani, R. J. (2005). Examining the differences between United States Generally Accepted Accounting Principles (U.S. GAAP) and International Accounting Standards (IAS): implications for the harmonization of accounting standards. Accounting Forum, 29(2), 219 -- 231.
Ernst & Young. (2013). U.S. GAAP versus IFRS. Retrieved from http://www.ey.com/Publication/vwLUAssets/EY-U.S.-GAAP-vs.-IFRS-the-basics-2013/$FILE/EY-U.S.-GAAP-vs.-IFRS-the-basics-2013.pdf
Hillman, A. D., Heaston, P. H., & Dodd, J. L. (2012). Convergence or Adoption of IFRS in the United States? Drake Management Review, 1(2), 5 -- 7.
Macve, R. (2015). Fair value vs. conservatism? Aspects of the history of accounting, auditing, business and finance from ancient Mesopotamia to modern China. The British Accounting Review, 47(2), 124 -- 141.
PwC. (2015). IFRS and U.S. GAAP: similarities and differences. Retrieved from http://www.pwc.com/us/en/cfodirect/assets/pdf/accounting-guides/pwc-ifrs-us-gaap-similarities-and-differences-2015.pdf
Accounting standards and IFRS adoption in Cambodia and Thailand The significance of accounting standards Accounting may be considered as a business language through which the statistical results can be acquired which help in analyzing how well the firm is functioning. They give out timely statements of these statistics and help the stakeholders get all the information they need. Accounting is like a separate language which has its own grammar and these outlines
S. GAAP," 2012). In other circumstances, IFRS requires the combination of two or more transactions when they are linked in a manner that the commercial impact can only be understood through referring to the transactions as a whole. Customer Loyalty Programs: Under IFRS accounting standards, loyalty or award programs in which a customer earns credit depending on their purchase of goods and/or services should be accounted for as multiple-element arrangements. Therefore, these
IFRS and GAAP Convergence Briefly describe Walmart The company establishment was in 1962 by Sam Walton. The company has grown through mergers and acquisitions to become the largest retail outlet in the globe. The main business of the company is corporate retail. The retailer offers a variety of products to its customers at a lower price compared to its competition. According to Fortune 500 ratings, the corporation ranks third among the largest
accounting standards in use throughout the world in the next 5 years? The need for a universal set of accounting standards was recognized years ago, the origins of which can traced back to early twentieth century where practitioners in the U.S. And elsewhere failed to implement uniform accounting principles. The call for uniformity went stronger when the U.S. stock market crashed in 1929. It was firmly believed by then that
" (Camfferman & Zeff, 2) Indeed, the purpose which seems to stand above many others as specific Standards are examined is the improvement of financial reports as informative documents inbuilt with the capacity to educate users as to the financial disposition and outlook of reporting entities. The declared purpose of the IFRS is to improve the comparability, clarity, relevance and reliability of accounting processes and the resultant financial reporting across a
International Financial Reporting Standards (IFRS) Generally Accepted Accounting Principles (U.S. GAAP) US GAAP is the general accounting principles, standard, and procedures that the U.S. companies follow to prepare their financial statements. GAAP has combination of accepted standards that the companies should follow when recording and reporting their accounting information. For example, GAAP has set up the rules that companies should follow when preparing the financial data such as balance sheet, revenue recognition,