Accounting Principles And International Financial Reporting Standards

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Executive summary This paper provides detailed information about the aspect or revenue recognition as compared to the US Generally Accepted Accounting Principles and International Financial Reporting Standards as the standards that are used in accounting (Ammons 45). The diverse differences that exist when either of the standards is used can be clearly noted as the paper illustrated the major variations in applications. Financial statements made using the right standards and procedure such as US GAAP and IFRS usually provides relevant, understandable, comparable and reliable financial statements that show a true and fair financial position of a company to all the users of financial statements Introduction The US Generally Accepted…show more content…
The organization should provide a true and fair view of the position it is and not to misrepresent their actual position. Comparison between US GAAP and IFRS in revenue recognition The two accounting boards usually try to work towards a general set of the procedures that is used to recognizing revenue. The International Financial Reporting Standards which is considered to be the International Accounting Standards Boards who are a counterpart to the US GAAP (Kadous 132). The revenue recognition is usually concerned with how and when record income as a result of completing a full earning process. The aspect of revenue recognition principle usually holds out that diverse companies should book or record the revenue when it is earned and not when received because the flow of cash in the company or firm does not have any relation to the revenue recognition. In this situation, it is well known as the principle of accrual basis accounting. On the other hand, however, the losses should be fully recognized or realized when their occurrence becomes presumably, whether it has occurred or not occurred. This comports with the restraint of conservatism, yet brings it into conflict with the constraint of consistency, in that reflecting revenues or the gains is inconsistent with the way in which losses are reflected (Ammons). According to Financial Accounting Standards Board and International Accounting Standards
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