Differences Between Ifrs And Us Gaap

The five research articles I have chosen to further my research on the convergence between U.S. GAAP and IFRS are The Implication of US GAAP and IFRS Convergence on American Business by Austin Willmore (2015), IFRS adoption by country by PWC (2015), International Financial Reporting Standards and American Generally Accepted Accounting Principles: the Convergence Lessons by Kuzina (2015), The economic impact of IFRS - a financial analysis perspective by Seay (2014), and Accounting for Leases The New Standard by CPA Journal (2016). These articles are related to my topic, where these researchers researched and analyzed the financial statement reporting on convergence of the U.S. Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS), and certain accounts when adopting IFRS present a different result in the financial reporting for U.S. reporting companies when U.S. GAAP standards combined with IFRS. Also, these research articles discuss the existence of two systems of standards, U.S. GAAP and IFRS; and the issue and difficulty of the process to fully converge.

This research project will inform the reader of the difference between the United States accounting standards and International accounting standards. The United States uses the Financial Accounting Standards Board (FASB) to issue financial reporting procedures. The International Financial Reporting Standards (IFRS) are issued by the International Accounting Standards Board (IASB). There are proposals for the United States to adopt the International standards. Financial reporting procedures are debated about the United States using the Generally Accepted Accounting Procedures (GAAP) or following the global procedures. This

There are several differences between the International Financial Reporting Standards (IFRS) and the U.S. Generally Accepted Accounting Principles (GAAP). The 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 the economics of a transaction better than U.S. GAAP. As a team me collaborated to answer the following seven questions.

A Comparison and Contrast Analysis of U.S. Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS)

|4. Effect of convergence on US financial statements, ratios, |Because US governments have more strict requirements than any |

Pace University | ACC 649 Contemporary Accounting Issues FALL 2016 | 70159 | Instructor: Dr. Kwang-Hyun Chung Research Proposal: Will the transition from U. S. GAAP to IFRS only have an effect on Financial Reporting? Abstract: The purpose of this research is to analyze if the transition from Generally Accepted Accounting Principles (GAAP) to International Financial Reporting Standards (IFRS) in the United States only has an effect on financial reporting. Throughout this paper, I will explain the advantages and disadvantages of adopting IFRS. Also, I will also identify the differences between both standards and how it affects other aspects of a company’s business operations. In essence, reporting under IFRS has its pros and cons but it is ultimately up to the Securities and Exchange Committee to fully implement what standard they want to U.S businesses to follow. Prepared by: Sharon Williams Introduction Over the last several years, the controversy of the United States adopting International Financial Reporting Standards (IFRS) has been a significant issue for many businesses who are pro Generally Accepted Accounting Principles (GAAP). Although U.S GAAP has been the common accounting principles for many countries, specifically the US, now countries are adopting IFRS. In addition, there are many organizations such as European Union (EU) and International Accounting Standards Committee (IASC), who want domestic and international businesses to have one

In the US, GAAP is used as the accounting principle. There have been a few changes though recently. In November 2007, the Securities and Exchange Commission (SEC) in the U.S. started accepting foreign company’s financial statements that were prepared using IFRS standards without requiring that they reconcile to U.S. GAAP. In November of 2008, the SEC published a new document that defined the rules to use for financial statements that were prepared following IFRS by U.S. firms. This document outlined steps needed to converge GAAP and IFRS (McGee & Bandyopadhyay, 2009). So far not much progress has been made to converge these two standards. One of the biggest stumbling blocks is inventory valuation.

There are two major similarities or points of convergence between US GAAP and IFRS. The first similarity is with regards to objectives of financial. In this case, both IFRS and US GAAP take the same general position with regards to objectives of financial reporting. The two main objectives shared by the two accounting bodies are relevancy of

The Financial Accounting Standard Board (FASB) and the International Accounting Standard Board (IASB) have been working jointly toward the convergence of the U.S. generally accepted accounting principles (GAAP) and the international financial reporting standards (IFRS). However, several arguments still exist as to whether or not U.S. companies should adopt or converge with IFRS. This qualitative study identified the differences noted between rules-based and principles-based accounting, and discussed the impact of these accounting standards on financial reporting. Additionally, several resources were analyzed to understand the path to convergence and the future state of IFRS. The examination of information regarding the transition towards one single set of accounting standards led to the

Accounting for business combinations is one of the more complicated processes in accounting. The basic idea can be quite simple. The assets and liabilities being acquired are recorded at fair value and the fair value of the consideration transferred is allocated to them, but there are many problems that can occur that make consolidating financial statements quite difficult to accomplish. In this research paper some of the simpler accounting for business combinations will be discussed. Specifically I will discuss the accounting for a 100% ownership acquisition for which the subsidiary is dissolved. The procedures that will be discussed will correspond to the accounting for these situations that must be performed on the date of acquisition. There are much more complicated instances of business combinations in which multiple problems can cause the accounting to be much more complicated, such as cases in which there is less than 100% ownership of a subsidiary or when the accounting must be performed for reporting after the year of acquisition, but these will not be discussed here. Instead this research paper will spend time detailing the acquisition method for the aforementioned situation; this paper will also contain discussion of the authoritative texts for business combinations for both United States generally accepted accounting standards (henceforth referred to as

The U.S Generally Accepted Accounting Principles and the International Financial Reporting Standards are the two major accounting standards used by accountants today. The GAAP is currently used only by firms in the United States, while the IFRS is used by firms in 110 countries, including those in the European Union. The U.S Securities and Exchange Commission is in charge of GAAP for public companies, while the Financial Accounting and Standard Board overlooks private companies. The standards for IFRS are set by the International Accounting Standard Board. The main difference that separates the GAAP and the IFRS is that the GAAP was constructed based on rules, while the IFRS was created based on accounting principles. Although there are many similarities in the way most things are done, there are also striking differences regarding the way financial statements are reported, including inventory valuation, balance sheets presentation, asset definition, etc. This paper seeks to identify some of the major discrepancies between GAAP and IFRS, and present arguments people have made for and against converging the two standards.

In any case it is being realized that the adoption of the IFRS certainly creates a lot of advantages not presently realized in the use of the GAAP. These accounting standards are generally the rules and regulations that companies and organizations are expected to adhere to in the process of presenting their financial statements to the stakeholders(Williams, 2009). The change from the GAAP to the IFRS is certainly needed given that the financial environment has certainly grown more complex and intricate to the extent that such differences in the accounting standards can only create the frequent challenges realized in the transactions(Watts, 2003).

The standards by which financial statements are reported are known as Generally Accepted Accounting Principles (GAAP) (Finkler, Jones, & Kovner, 2013).  The United States (US) recognizes GAAP to be a set of rules used by accountants in financial reporting (Finkler et al., 2013).  The United States-GAAP (US-GAAP) were established by the Financial Accounting Standards Board (FASB) (Finkler et al., 2013). The US-GAAP are primarily used in the US whereas many other countries have adopted their own general accounting standards known as the International Financial Reporting Standards (IFRS) (Finkler, Ward, & Calabrese, 2013). The IFRS were established by the International Accounting Standards Board (IASB) and have both similarities and differences to the US-GAAP (Finkler et al., 2013).   The purpose of GAAP are to standardize the manner in which the financial status of an organization is interpreted so financial information is useful for investors, lenders and those that an organization is accountable to or compared to (Finkler et al., 2013).

There are two distinct methods of accounting for finances in the business world. These two methods are the methods both prescribed by the U.S., which is known as the generally accepted accounting principles (GAAP), and that which is used by the international community known as international financial reporting standards (IFRS). GAAP is regulated by the financial accounting standards board (FASB) while IFRS is regulated by the international accounting standards board (IASB). These two methods are currently under a process which is known as convergence or harmonization so that the United States will eventually become integrated into the global community (Miller, S. E. 2009). This will cause financial statements to be more usable for more people across the globe as well as enhance citizens of the U.S.’s ability to perform business more efficiently internationally.

The table 1 below summarized the six accounts analyzed earlier; these accounts show the impact on American companies’ financial reporting when accounting standards converge between U.S GAAP and IFRS reporting. The accounting