IFRS TO GAAP
Comparing IFRS to GAAP
Craig Ronquillo
ACC/291
8 December, 2014
Joseph Bailey
Comparing IFRS to GAAP
I will be comparing IFRS to GAAP, and be discussing many ways these two get along with each other and see what they do differently as well, they both have their ways of doing things which are easier but sometime even harder.
IFRS 8-1: What are some steps taken by both the FASB and IASB to move to fair value measurement for financial instruments? In what ways have some of the approaches differed?
The fair value measurements does provide the users who have the financial statements with correct picture of the value of the company’s assets. The IFRS and GAAP, demand firms to include information that is essential to fair value measurement practices in the notes of financial statements. It does not matter which system they companies pick, they will still be required to report assets at their book value or fair value, but depending on the situation. All the assets that are in the same class must then receive the same valuation treatment. But when were are talking value of receivables, IRFS uses a two tiered method that first analyzes individual receivables, then looks at the receivables as a whole to determine if there is any impairment.
IFRS 9-1: What is component depreciation, and when must it be used?
The component depreciation is when an asset fundamentally has different parts that will be depreciated with the different treatment. When under the IFRS, companies are required to use component depreciation only if the parts of the asset offer vary patterns of benefit. So the main reason behind that is it provides a clearing picture of the asset’s value. This would be also permitted under the GAAP, from what I have read U.S. companies barely use it in practice.
IFRS 9-2: What is revaluation of plant assets? When should revaluation be applied?
Now reevaluation of the plant assets are defined when the process of the change in values from book value then to fair
Craig Ronquillo
ACC/291
8 December, 2014
Joseph Bailey
Comparing IFRS to GAAP
I will be comparing IFRS to GAAP, and be discussing many ways these two get along with each other and see what they do differently as well, they both have their ways of doing things which are easier but sometime even harder.
IFRS 8-1: What are some steps taken by both the FASB and IASB to move to fair value measurement for financial instruments? In what ways have some of the approaches differed?
The fair value measurements does provide the users who have the financial statements with correct picture of the value of the company’s assets. The IFRS and GAAP, demand firms to include information that is essential to fair value measurement practices in the notes of financial statements. It does not matter which system they companies pick, they will still be required to report assets at their book value or fair value, but depending on the situation. All the assets that are in the same class must then receive the same valuation treatment. But when were are talking value of receivables, IRFS uses a two tiered method that first analyzes individual receivables, then looks at the receivables as a whole to determine if there is any impairment.
IFRS 9-1: What is component depreciation, and when must it be used?
The component depreciation is when an asset fundamentally has different parts that will be depreciated with the different treatment. When under the IFRS, companies are required to use component depreciation only if the parts of the asset offer vary patterns of benefit. So the main reason behind that is it provides a clearing picture of the asset’s value. This would be also permitted under the GAAP, from what I have read U.S. companies barely use it in practice.
IFRS 9-2: What is revaluation of plant assets? When should revaluation be applied?
Now reevaluation of the plant assets are defined when the process of the change in values from book value then to fair
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