Pologeorgis (2012) stated that the diversity of accounting principle has an essential impact on the stock markets, corporate management, and financial reporting. He pointed that when people seeking for international capitals, varies of dissimilar accounting principles create discrepancies in their financial reporting. If people cannot understand the differences between IFRS and GAAP, they may have the chance to make the wrong decisions and loss money in the capital markets. Pologeorgis (2012) also mentioned that international investors have to relearn the new principal in order to be more familiar with the international standards. Based on above, there is a keen motivation for people to understand the differences and similarities of GAAP and IFRS. This research will show business people the main similarities and differences of GAAP and IFRS.
The purpose of this report is to look at the advantages and disadvantages that would occur if the United States were to switch their financial reporting standards from U.S GAAP
The globalization of business activity has resulted in the need for a uniform set of accounting rules in all countries. With U.S. corporations doing so much business in other countries, it is imperative that the SEC and international regulatory boards devise a set of rules and regulations that would benefit both parties. If this did not happen, international companies would be able to do whatever they wanted without repercussion because of the discrepancies in the differing sets of rules. Accomplishing this universal set of rules would allow companies to list securities in any market without having to prepare more than one set of financial statements. There have been so many
Various attempts have been made by Equitable Life to avoid insolvency, primarily at the expense of policyholders, but it was too late. The liability, worth £1.5 billion at the time it froze the value of all current with-profit policies, was going to swell even more if interest rate were to fall further, and nothing could possibly stop this from happening. There is still a lot of debate about the adequacy of regulation, and possible measures the Financial Services Authority (FSA) should have imposed on Equitable Life and other life insurers when it formally took over responsibility for the regulation of insurance in January 1999. There are also many fingers pointed at regulators who did not express any concern over the liabilities of Equitable Life in the early 1990s, when there was possibly still enough time to reverse the misfortune. One thing for sure: by failing to properly hedge its liabilities, Equitable robbed its policyholders of their peaceful retirement, and mistakes of such an enormous scale should never happen again. On 2/12/00, The Times published a
Due to the forecasted high demand in the future, Gobias Industires, Inc. plans to report the company’s financial statements as soon as the next year. However, the argument is whether the company should report its financial statements consistent with the US Generally Accepted Accounting Principles (US GAAP) or the International Financial Reporting Standards (IFRS), when IFRS may be the reporting standard for US companies in the near future. I suggest Gobias Industries start reporting financial statements under both US GAPP and IFRS because the company is a U.S. based potential global firm.
The documents that comprise GAAP vary in format, completeness, and structure. As a result, financial statement preparers sometimes are not sure whether they have the right GAAP; determining what is authoritative and what is not becomes difficult. In response to these concerns, the FASB developed the Financial Accounting Standards Board Accounting Standards Codification. The FASB’s primary goal in developing the Codification is to provide in one place all the authoritative literature related to a particular topic. Professional accountants pay for access to the FASB. The OU Accounting Department has paid for academic access to the FASB Codification. Our Login information is:
Deloitte Touche Tohmatsu (2008). IFRS and U.S. GAAP A Pocket Comparison. Retrieved on November 7, 2011 from: http://www.iasplus.com/dttpubs/0809ifrsusgaap.pdf
This difference may create a big challenge for management of U.S. entities that were required to report their consolidated financial statements under U.S. GAAP but have
Dramatically diverse beginning stages influenced the way to deal with the protection contracts venture. GAAP long has had benchmarks while IFRS has not. In light of input from financial specialists and others that GAAP was to a great extent addressing their needs, the FASB surrendered the key updates fundamental for full joining to concentrate on more focused on
GAAP (Generally Accepted Accounting Principles) determine the content and format of financial statements. SEC (Securities and Exchange Commission) requires publicly traded companies to issue annual audit. Concerns are about adequacy of disclosure; and behavioral implications are secondary.
US GAAP and foreign GAAP are similar but there exists some problems between them especially on how financial statements are presented, how revenues are recognized and on what the fair market value is. According to Hernán A.
GAAP is exceptionally useful because it attempts to regulate and normalize accounting definitions, assumptions, and methods. Because of generally accepted accounting principles one is able to presuppose that there is uniformity from year to year in the methods that are used to prepare a
The US Generally Accepted Accounting Principles (GAAP) is a set of international accounting rules which originated from the United States. US GAAP can be defined as a set of accounting principles, standards and procedures that companies use to compile their financial statements (Elliott & Elliott, 2008). The International Financial Reporting Standards (IFRS) on the other hand are accounting rules originating from the United Kingdom. International Financial Reporting Standards (IFRS) are a set of accounting rules designed with a common global language for business affairs so that financial accounts of companies are understandable and comparable across international boundaries (Devinney, Pedersen & Tihanyi, 2010).
The board acknowledges the diverse nature of regulatory framework in developing concrete and uniform standards. These standards help in proposing and clarifying a complete guidance as well as demonstrating the understanding of complex issues in accounting. Moreover, help in demonstrating advanced knowledge in the application of accounting standards in the preparation and analysis of financial statements.