GAAP vs. IFRS comparison

1264 Words Dec 13th, 2013 6 Pages
GAAP/IFRS Financial Statement Comparison

Through this course we have been taking a closer look into the Generally Accepted Accounting Principles (GAAP) and the International Financial Reporting Standards (IFRS). The book lays out the major similarities and differences between the two separate but equal accounting methods. I say, “Equal”, in the sense that the IFRS and GAAP accounting methods are two different ways that the any company that could come to the conclude the financial statements for any such accounting period. The differences that have apparent between the two methods, GAAP is only used in companies that have been started in the United States, whereas internationally IFRS has been adopted by those prospected companies.
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As well as, the key assumptions and estimation of the material value adjustments to the carrying amounts of the assets and liabilities. It can be easily seen that the accounts for both Exxon and BP companies have many similarities. The accounts for both GAAP and IFRS have a tendency to be similar, making it easy for the reader to compare the information that is laid out in the financial statements. Other differences that we will see between the two different policies, when reviewing the balance sheet, are the way in which the assets are listed are in the reverse manor on the balance sheet. When following IRFS, the accounts are listed in the terms of liquidity at the bottom of assets. Under IFRS, the information is presented with the most liquid account listed at the end of the assets division. This dissimilarity will not make a massive impact on what investor’s information on the company that they are reviewing. The other differences that we will see when dealing with the differences, the terminology is different under IFRS. The balance sheet is no longer stated as the “Balance Sheet”; it is now referred to as the “Group Balance Sheet”. This is not a major difference between BP and Exxon, for example in other companies that follow IFRS, the balance sheet s called the “Statement of Financial Position”. This difference could make it increasingly difficult

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