Financial Analysis of Apple Inc and Philips: Differences of Valuation Approach between US GAAP and IFRS

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Financial Accounting Introduction Objective of this paper is to carry out financial analysis of Apple Inc and Philips using the company recent balance sheets and income statements. The case also cites the differences of valuation approach between US GAAP and IFRS. Differences between US GAAP and IFRS The US GAAP (Generally Accepted Accounting Principles) is a standard accounting framework in the United States guiding the presentation of financial accounting for the US companies. GAAP includes standards, rules and conventions that accountants follow in the preparation of a company financial statements. The concept GAAP is commonly used in the United States where it is abbreviated as US GAAP. Meanwhile, the U.S. Securities and Exchange Commission (SEC) require all publicly traded companies in the United States to follow the GAAP rules in the preparation of their financial statements. On the other hand, IFRS (International Financial Reporting Standards) is an accounting rules and regulations designed to ensure that company accounts are comparable across the international boundaries. With growing number of international trade and shareholdings, the goal of IFRS is to set accounting standard for companies to follow across the international boundaries. Under the GAAP and IFRS accounting frameworks, both bodies present accounting components, which include financial statements, cash flows, and comprehensive income. Both accounting standards require companies to prepare

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