IFRS Vs US GAAp
IFRS vs U.S. GAAP
Victoria Harris
American Public University
Acct 610 There are two sets of accounting standards that are used worldwide. One is the International Financial Reporting Standards (IFRS) and the U.S. Generally Accepted Accounting Principles (GAAP). There is a huge desire for there to one set of accounting standards worldwide with the increase of companies performing business in many different countries and global expansion. The International Financial Reporting Standards are issued by the International Accounting Standards Board. These set of accounting standards are international in more than 110 countries and the state how certain transactions and other events should be reported in the preparation of financial statements. This set of standards’ purpose is to make international comparisons easier. This is not an easy task, though, because there is already set rules in every country. U.S. Generally Accepted Accounting Principles are another set of accounting standards that is adopted by the U.S. Securities and Exchange Commission (SEC) and are the rules followed by companies in the United States when compiling financial statements. These set of standards was originally developed by auditors and regulated by the American Institute of Certified Public Accountants (AICPA) historically. The SEC is now considering changing the standards for the United States and going with the International Financial Reporting Standards in order to create a more constant standard across the globe. There are many differences in the International Financial Reporting Standards and the U.S. Generally Accepted Accounting Principles. The main difference between the two is that the IFRS is considered to be a more principle based accounting standard. On the other hand, the U.S. GAAP is considered to be a more rule based accounting standard. Due to this consideration, it is believed that the IFRS embodies and captures the finances of a matter better than
Victoria Harris
American Public University
Acct 610 There are two sets of accounting standards that are used worldwide. One is the International Financial Reporting Standards (IFRS) and the U.S. Generally Accepted Accounting Principles (GAAP). There is a huge desire for there to one set of accounting standards worldwide with the increase of companies performing business in many different countries and global expansion. The International Financial Reporting Standards are issued by the International Accounting Standards Board. These set of accounting standards are international in more than 110 countries and the state how certain transactions and other events should be reported in the preparation of financial statements. This set of standards’ purpose is to make international comparisons easier. This is not an easy task, though, because there is already set rules in every country. U.S. Generally Accepted Accounting Principles are another set of accounting standards that is adopted by the U.S. Securities and Exchange Commission (SEC) and are the rules followed by companies in the United States when compiling financial statements. These set of standards was originally developed by auditors and regulated by the American Institute of Certified Public Accountants (AICPA) historically. The SEC is now considering changing the standards for the United States and going with the International Financial Reporting Standards in order to create a more constant standard across the globe. There are many differences in the International Financial Reporting Standards and the U.S. Generally Accepted Accounting Principles. The main difference between the two is that the IFRS is considered to be a more principle based accounting standard. On the other hand, the U.S. GAAP is considered to be a more rule based accounting standard. Due to this consideration, it is believed that the IFRS embodies and captures the finances of a matter better than
References: (n.d.). Retrieved February 5, 2015, from http://www.iasplus.com/en/binary/dttpubs/0703ifrsusgaap.pdf Differences Between GAAP and IFRS and Implications of Potential Convergence - Boundless Open Textbook. (n.d.). Retrieved February 5, 2015, from https://www.boundless.com/accounting/textbooks/boundless-accounting-textbook/introduction-to-accounting-1/conventions-and-standards-21/differences-between-gaap-and-ifrs-and-implications-of-potential-convergence-131-7049/ Houston, G. (n.d.). The Disadvantages of Harmonizing Accounting Standards. Retrieved February 4, 2015, from http://smallbusiness.chron.com/disadvantages-harmonizing-accounting-standards-25107.html The Finance Professionals ' Post. (n.d.). Retrieved February 5, 2015, from http://post.nyssa.org/nyssa-news/2010/04/current-major-differences-between-ifrs-and-us-gaap.html