Comparison Between US GAAP and International Financial Reporting Standards and Disclosures

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Comparison Between U.S.GAAP and International Financial Reporting Standards and Disclosures Introduction The United States Generally Accepted Accounting Principles (GAAP) and the International Financial Reporting Standards (IFRS) have both similarities and differences that must be explored. In 2002 the similarities became more concrete and the differences were mitigated with the Norwalk Agreement, which was a memorandum of understanding between the United States and the International Accounting Standards Board (Financial, 2002). The agreement stated that the two sides were both looking for compatible accounting standards that could be used in both cross-border and domestic reporting (Financial, 2002). By making the US standards and other accounting standards compatible with one another, there is a higher chance of helping investors determine which companies would be the best choice for them. It is also easier for mergers and acquisitions, as well as other financial transactions between companies, if the accounting requirements are very similar between the US and other countries, since fewer discrepancies are seen (AICPA, 2008; American, 2009). In order to understand the similarities and differences between GAAP and IFRS, some of the more prominent ones must be addressed. That will help the reader analyze the field of accounting and see where the problems lie. Additionally, the similarities and differences between GAAP and IFRS affect the field of international
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