z3louk
GAAP vs IFRS
Diffen › Economics › Business › Business Finance › Accounting
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 U.S. Securities and Exchange Commission is looking to switch to IFRS by 2015.
What follows is an overview of the differences between the accounting frameworks used by GAAP and IFRS. This is at a broad, framework level; differences in accounting treatments for individual cases may also be added as this gets updated.
Comparison chart EMBED THIS CHART
Improve this chart GAAP IFRS
Stands for: Generally Accepted Accounting Principles International Financial Reporting Standards
Introduction (from Wikipedia): Generally accepted accounting principles (GAAP) refer to the standard framework of guidelines for financial accounting used in any given jurisdiction; generally known as accounting standards or standard accounting practice. International Financial Reporting Standards are designed as a common global language for business affairs so that company accounts are understandable and comparable across international boundaries.
Used in: United States Over 110 countries, including those in the European Union
Performance elements: Revenue or expenses, assets or liabilities, gains, losses, comprehensive income Revenue or expenses, assets or liabilities
Required documents in financial statements: Balance sheet, income statement, statement of comprehensive income, changes in equity, cash flow statement, footnotes Balance sheet, income statement, changes in equity, cash flow statement, footnotes
Inventory Estimates: Either last-in, first-out or first-in, first-out Only first-in, first-out
Inventory Reversal: Prohibited Permitted under certain criteria
Purpose of the
Diffen › Economics › Business › Business Finance › Accounting
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 U.S. Securities and Exchange Commission is looking to switch to IFRS by 2015.
What follows is an overview of the differences between the accounting frameworks used by GAAP and IFRS. This is at a broad, framework level; differences in accounting treatments for individual cases may also be added as this gets updated.
Comparison chart EMBED THIS CHART
Improve this chart GAAP IFRS
Stands for: Generally Accepted Accounting Principles International Financial Reporting Standards
Introduction (from Wikipedia): Generally accepted accounting principles (GAAP) refer to the standard framework of guidelines for financial accounting used in any given jurisdiction; generally known as accounting standards or standard accounting practice. International Financial Reporting Standards are designed as a common global language for business affairs so that company accounts are understandable and comparable across international boundaries.
Used in: United States Over 110 countries, including those in the European Union
Performance elements: Revenue or expenses, assets or liabilities, gains, losses, comprehensive income Revenue or expenses, assets or liabilities
Required documents in financial statements: Balance sheet, income statement, statement of comprehensive income, changes in equity, cash flow statement, footnotes Balance sheet, income statement, changes in equity, cash flow statement, footnotes
Inventory Estimates: Either last-in, first-out or first-in, first-out Only first-in, first-out
Inventory Reversal: Prohibited Permitted under certain criteria
Purpose of the