International Financial Reporting Standards And The United States Generally Accepted Accounting Principles

The International Accounting Standards Board (IASB) was formed in an attempt to bring uniform accounting standards within international countries through its issuing of the International Financial Reporting Standards (IFRS). Today, over 100 countries including Canada, India, and Japan have adopted these standards for financial reporting. The growth of multinational companies such as Coca Cola and the increasing desire of cross-border investing have made it apparent that the U.S.accounting standards known as the Generally Accepted Accounting Principles (GAAP) issued by the Financial Accounting Standards Board (FASB) can no longer remain separate from IFRS. Under the request of the Securities and

There is no universal GAAP standard and the specific vary from one geographic location or industry to another. In the United States, the Securities and Exchange Commission (SEC) mandates that financial reports adhere to GAAP requirements. The financial accounting standards Board (FASB) stipulates GAAP overall and the Governmental accounting standards Board (GAAP) stipulates GAAP for state and local government. Publicly traded companies must comply with both SEC and GAAP requirements. In recent years it also has had the chance to look at the United States Generally Accepted Accounting Principles (GAAP) and modify the rules to enhance clarity and consistency, intentionally setting itself apart from U.S. GAAP. The convergence of these two accounting frameworks is a must for both foreign and domestic businesses. The International Financial Reporting Standards (IFRS) is the accounting framework used by the European Union, Japan, Canada, and other world economic leaders. Companies need an accurate and reliable financial accounting systems not matter if globally or in the United

With the growth of international business there is a need to standardize financial statements globally. Presently there are “approximately 120 foreign private issuers currently that report to the Commission using IFRS financial statements.” By standardizing accounting practices investors will be able to make informed decisions based on comparability and accuracy of financial statements. The SEC released this statement in 2008, “We believe that IFRS has the potential to best provide the common platform on which companies can report and investors can compare financial information.” The SEC has created a “Roadmap” or plan to convert US GAAP over to IFRS. According to The Committee of

Although the International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP) have a lot of similar guidelines and expectations, they also differ in many ways. The IFRS employs more of a “principles based” accounting standards whereas GAAP utilizes more of a “rules based” approach. Even though there are differences between terminology, revenue recognition, gains and/or losses, and statement presentation, both standards do follow the same conceptual guidelines. With the Sarbanes-Oxley Act (SOX) of 2002, the standards expected of foreign countries are significantly less than those that reside as publically

In 2008, the Securities and Exchange Commission (SEC) issued a road map for the United States (US) to implement International Financial Reporting Standards (IFRS) that would eventually lead to the dissolution of US Generally Accepted Accounting Principles (US GAAP) (Cox 2008). US GAAP is rules based system of accounting that contains over 25,000 detailed pages of guidance, whereas IFRS is a principles based system of accounting that contains 2,500 pages of guidance. IFRS allows accountants to exercise professional judgment when making many decisions. This paper will compare and contrast US GAAP with IFRS on Intermediate Accounting Topics.

The U.S., despite a strong initial reluctance to adopt the new standards, are currently working toward a convergence of U.S. GAAP and IFRS. The SEC recently approved 2015 as the earliest

There are several differences between the International Financial Reporting Standards (IFRS) and the U.S. Generally Accepted Accounting Principles (GAAP). The IFRS is considered more of a "principles based" accounting standard in contrast to U.S. GAAP which is considered more "rules based." By being more "principles based", IFRS, arguably, represents and captures the economics of a transaction better than U.S. GAAP. As a team me collaborated to answer the following seven questions.

Additionally, there will be a need for a global security force to apprehend offenders of the new standards. This could be a controversial problem in itself. The main issue, is to establish the standards first and get every public trading company to buy in on the idea of implementing the standards. Currently, many countries have agreed to adhere to the international standards. As more countries are adopting the IFRS, the U.S. has yet to agree to the standards. Even though the GAAP and IFRS resembles closely, there are still some issues to be worked out (Street, 2012). Eventually the U.S. will agree to the terms of the IFRS, once all the terms and conditions are in balance (Zeff,

Măciucă, Ursache, Moroşan, and Apetri (2014) state IFRS and GAAP are two similar systems but they are not identical. IFRS has been accepted by the U.S. since 2008. Prior to 2008, companies had to reconcile financial records into GAAP format. Financial Accounting Standards Boards (FASB) and International Accounting Standards Boards (IASB) must continue to merge both standards for the benefit of all. Smith (2012) analyzed the financial data from international companies operating in the U.S. in 2005 and 2006 and discovered no significant differences between GAAP and IFRS. The differences between GAAP and IFRS can be cosmetic and substantive (p.

The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) are working together to eliminate a variety of difference between the United States generally accepted accounting procedures (U.S. GAAP or GAAP) and International Financial Reporting Standards (IFRS). This convergence project grew out of an agreement reached by the two boards in 2002 (Deloitte, 2004).

IFRS and GAAP are two separate sets of accounting used in different countries. ISAB created IFRS and they are hoping to create a set of universal accepted accounting principles for a better comparability between companies of different countries. IFRS is principal base while US GAAP is rules based. There are advantages and disadvantages to transition to IFRS from GAAP, and by comparing US GAAP and IFRS we noticed a lot of the same standards and concepts, but also some major differences.

It has been said that conceptually IFRS is more of a principles based accounting standard, while GAAP is more of a rules based accounting standard (Nguyen, 2010). There are both advantages and disadvantages to switching to IFRS from GAAP. Some advantages are: comparisons to foreign companies will be that much easier, and raising capital through foreign nations will be made easier because investors are used to seeing financial statements

In the global business arena, there are two main institutions whose accounting standards are used for financial reporting, Generally Accepted Accounting Principles (GAAP) and the International Financial Reporting Standards (IFRS). The IFRS, whose rules are established and maintained by the International Accounting Standards Board (IASB), is the most widely used of the two institutions but the primary choice for the United States continues to be GAAP, whose standards are established and maintained by the Financial Accounting Standards Board (FASB). Although both systems have many similarities, there are a variety of significant differences that have a great impact on how reporting amounts are calculated and reported to the general public.

First, The International Accounting Standards Board (IASB) issues The International Financial Reporting Standards (IFRS) on U.S securities and exchange companies listed.

IFRS are the less-detailed financial reporting rules developed by ISAB that have become widely mandated, adopted or emulated in by over 100 countries. The IFRS is increasingly being adopted by companies across the globe for preparing their financial statements. On the other hand, the US GAAP has been developed by the Financial Accounting Standards Board or FASB for listed companies. Securities Exchange Commission has asked US companies for transition to IFRS by 2016.