Comparing the Gaap and Ifrs

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Introduction There have been proposals that have been working on with regard to the replacement of GAAP (Generally Accepted Accounting Principles) with IFRS (International Financial Reporting Standards) as used in the accounting and financial reporting aspects. Such convergence requires that the functions of the GAAP standards be added to the IFRS. The International Accounting Standards Board (IASB) developed the IFRS which is a less-detailed financial reporting system. This paper seeks to analyze the GAAP and the IFRS, their mandate and functions. Further, it shall compare the differences and similarities of the two standards which have such great implications to the functions of accountants, attorneys, corporate directors and…show more content…
However, it must not be ruled out that the basic financial statements are similar to those of the IFRS standard (Epstein & Jermakowicz, 2010). The FASB conceptual framework bears a marked similarity to the IASB framework which works to effect efficient preparation and presentation of financial statements. It is under this framework that convergence with the IFRS is promised. However, there exists a comprehensive guide in view of financial statements in terms of preparation and presentation in the IFRS standards. There is also a minimum point identified for the identification of all items in the financial statements. In the IFRS, both the FASB and IASB frameworks are essential in the preparation and presentation of financial statements. However in these IFRS standards, the IASB is less detailed. Convergence with the GAAP is also promised. In the GAAP standards, comparative financials are preferred although it is not a requirement. These are of paramount importance especially for SEC filings. In this basic principle, specificity is required with regard to the location of disclosure either in statements or notes. The FASB is the official source and up in the hierarchy above GAAP for the purposes of accounting standards codification
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