815 WordsFeb 11, 20154 Pages
Comparing IFRS to GAAP Craig Ronquillo ACC/291 8 December, 2014 Joseph Bailey Comparing IFRS to GAAP I will be comparing IFRS to GAAP, and be discussing many ways these two get along with each other and see what they do differently as well, they both have their ways of doing things which are easier but sometime even harder. IFRS 8-1: What are some steps taken by both the FASB and IASB to move to fair value measurement for financial instruments? In what ways have some of the approaches differed? The fair value measurements does provide the users who have the financial statements with correct picture of the value of the company’s assets. The IFRS and GAAP, demand firms to include information that is essential to fair value…show more content…
So when the asset is being look at under IFRS, it is required that all assets in its class must be treated with the same evaluation method. IFRS 9-3: Some product development expenditures are recorded as development expenses and others as development costs. Explain the difference between these accounts and how a company decides which classification is appropriate. The companies that use the GAAP standards have to expense all their research and development dues by reporting them on the income statement. So when the technological viability has been there, it is optional for the firm to start reporting costs as capital expenditures. This will allow the costs to be depreciated over the useful life that the tech provides. FRS 10-2: Explain how IFRS defines a contingent liability and provide an example. The contingent liability is an obligation that could have a probability of occurring in the future. Items will not be included in financial statements, but should be still in the notes. The organization will also be required to measure the nature of the contingent liability in subsequent account periods. For example if a building of the company exploded cause serious damage to other building, neighborhoods and the surrounding area then the contingent liability would cover the fines and repairs, so that is one of

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