Ifrs And Gaap Vs. Gaap

1168 Words Apr 27th, 2015 5 Pages
Introduction
This covers most of the basics about IFRS and GAAP, and many of the questions which are asked by curious people interested in accounting, also the users within the accounting world. Included is; some steps taken by both the FASB and ISAB to move to fair value measurements for financial instruments and the way that it is differed, what component depreciation is and when must it be used, what revaluation for plant assets and when it should be applied, some product development expenditures are recorded as development costs so explain the difference between those accounts and how a company decides which classification is appropriate, how IFRS defines a contingent liability and provide an example, and describe some similarities and
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This type of depreciation happens when an asset has fundamentally different parts which must be depreciated with a much different treatment than regular depreciation. Component depreciation is allowed under GAAP but it is seldom used in the United States practices. Under both GAAP and IFRS, changes in the depreciation method used and changes in useful life are handled in current and future periods. Prior periods are not affected by this. GAAP recently confirmed to IFRS in the accounting for changes in depreciation methods. IFRS uses the term residual value. In accordance with IFRS, component depreciation must be used if parts of the asset offer varying patterns of benefit.

What is Revaluation for Plant Assets?

9-2: Revaluation of plant assets means an evaluation of plant assets by an individual valuer and writing the assets at their market value. Revaluation of plant assets is allowed if a plant asset suffers a long-term drop in its value. This can happen to the item if it becomes obsolete. The value of the asset can be adjusted through the revaluation on the books at this point, which will lower its book value and will change the depreciation figures on it. This process if required in the event that there have been substantial economic changes in the market value. It affects the current financial statements but it does

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