Differences Between the US GAAP and IFRS Valuation Technique

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Running Head: ACCOUNTING Accounting ACC 401 Assignment 19 June 2013 Introduction U.S GAAP refers to Generally Accepted Accounting Principles, which is a standard accounting principle mandated for private and public organizations in the United States. On the other hand, International Financial Reporting Standards (IFRS) is an accounting standard designed for companies operating internationally. While there are several similarities between the two accounting principles, there are still major differences. A valuation technique is one of the major differences between the US GAAP and IFRS. Differences Between the US GAAP and IFRS Valuation Technique Under the US GAAP, the revaluation of tangible assets such as plant, equipment and property and intangible assets is not permitted. However, under IFRS, revaluation of asset is permitted other than the impairment of goodwill. Under IFRS, agricultural products such as biological assets are measured based at their fair value less cost at the point of harvest. Under the US GAAP, agricultural products are measured at its market or sale price. (KPMG , 2012). Methods used to determine impairment of long-lived assets are different under US GAAP and IFRS. The two-step approach is used to value the impairment of long-lived assets under the US GAAP. However, one-step approach is required to measure impairment of long-lived assets under the IFRS. (Ernest & Young, 2012). The estimated cash flow being used to assess amortization
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