What are some of the key differences between IFRS and U.S. GAAP? The International Financial Reporting Standards (IFRS) - the accounting standard used in more than 110 countries - has some key differences from the U.S. Generally Accepted Accounting Principles (GAAP). At the conceptually level‚ IFRS is considered more of a "principles based" accounting standard in contrast to U.S. GAAP which is considered more "rules based." By being more "principles based"‚ IFRS‚ arguably‚ represents and captures
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the overall financial statements are presented in accordance with an acceptable financial reporting framework USERS: Different groups for different purposes—many outside entities NATURE: Highly standardized FREQUENCY: PAs: Almost always AGs: Occasionally CRA: Never Internal: Never TYPE OF AUDITORS – SCOPE PAs: Perform audits in accordance with auditing standards of published financial statements prepared in accordance with GAAP or IFRS OAG: Perform compliance or operational audits in order to assure
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which accounting numbers – the GAAP or non-GAAP numbers best reflects economic reality? [10 points] Economic reality can be defined as the overall outlook of the economy at a certain point in time. This outlook includes factors such as interest rates‚ politics‚ and speculation. In its Q4 financial results Apple reported both GAAP and non-GAAP revenue and net profit for the iPhone. Their GAAP results showed 7.9 billion in revenue and 1.1 billion in net profit. The non-GAAP showed revenue of 11.7 billion
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reasons:- 1. Under “non-GAAP measures”‚ Apple’s performance looked much better than that under GAAP measures. Please find below a table1 summarizing the differences of key financial data between GAAP and non-GAAP measures for the fourth quarter of 2008:- Q4 2008 GAAP ($ billions) Non-GAAP ($ billions) % Increase Total sales $7.9 $11.7 48% Total Income 1.1 2.4 115% iPhone Sales 0.8 4.6 475% iPhone as % of Sales 10% 39% This is because under subscription accounting (GAAP)‚ Apple recognized the
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Country A GAAP but decrease net income under Country B GAAP? The adjustment for goodwill amortization increases net income under Country A GAAP but decrease net income under Country B GAAP because of how SKD amortizes goodwill for a period of 20 years while for Country B goodwill is only amortized for a period of 5 years. This leads to a greater amount to be amortized by Country B since their period is shorter‚ leading to a decrease in Country B’s GAAP net income. Now‚ Country A’s GAAP has an increase
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CASE 4-1: Bessrawl Corporation Reconciliation of net income from U.S. GAAP to IFRS 2011 Net Income according to U.S. GAAP attributable to equity holders of Bessrawl Corporation ………… $1‚000‚000.00 IFRS adjustments: Add: Reversal of inventory cost written down to replacement cost….. 10‚000.00 Less: Additional depreciation of building after 2011 revaluation……..
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Introduction When accounting standards change‚ the impact those changes have on debt contracts is influenced by virtue of the ’rolling ’ (floating) or ’frozen ’ generally accepted accounting principles (GAAP) applied to the debt covenants within the contracts. Positive accounting theory (PAT) assumes managers will act in self interest once contracts are in place (Deegan 2009‚ p. 292) and this may or may not lead managers to lobby standard setters in support for or against draft changes to standards
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WAN NOR HANNIS IZATIE BINTI DAUD 2012616766 AC2208A 2.4 Explain how international differences in ownership and financing of companies could lead to differences in financial reporting. Different countries have different types of ownership. Capital provided by banks is very significant‚ as are small family member in Germany‚ France and Italy which they are also similar in using the Codifies Roman Law as their legal system. In the other hands‚ in the United States and United Kingdom there are large
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Prepared by: Ayman Erfan Submission date: 11th of March 2013 This assignment answers question # 2: Distinguish between cash basis accounting and accrual basis accounting. Why for most business enterprises is accrual basis accounting acceptable and the cash basis accounting unacceptable in the preparation of an income statement and a balance sheet? Cash basis accounting is an accounting method wherein revenues are recognized when cash is received and expenses are recognized when paid
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make independent judgments about the most appropriate course of action. Conduct standards generally require little judgment; you obey or incur a penalty‚ and the code provides a fairly clear set of expectations about which actions are required‚ acceptable or prohibited. Critically discuss the role Arthur Andersen in the ENRON scandal Arthur Andersen was Enron’s main accounting firm. It was responsible for auditing at the firm and for verifying that Enron’s financial
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