Ifrs Adoption Affects Taxes, The Mergence Or Adoption Of The International Financial Reporting Standards
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IFRS Adoption Affects Taxes The mergence or adoption of the International Financial Reporting Standards (IFRS) in the United States will affect the taxes a company will pay due to the differences in IFRS and U. S. Generally Accepted Accounting Principles (GAAP). One major hurdle to this happening is to get the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) to agree on exactly how this will happen. For most U.S. companies, a major concern is how this adoption of IFRS will ultimately affect the way they do business, how it changes reporting, and how it will affect the company financially. A real concern is changing from a rules-based standard (GAAP) into a principles-based standard (IFRS) used throughout the rest of the world. From a tax perspective, the focus of this research is to show how some of the required changes in Last In First Out (LIFO), inventory evaluation (LCM), and revenue recognition be changed using IFRS.
Last in first out The use of LIFO as an inventory management system is recognized as one of three management systems and has been accepted by GAAP. However, IFRS does not recognized LIFO as an acceptable management system. Many advocates of LIFO argue that it provides an accurate revenue match with expenses since sales reveal the most recent selling prices, then the cost of goods sold should also reflect the most recent inventory purchasing costs. However, the ending inventory balances shown on the