The Convergence Between U.s. Gaap And Ifrs

Pologeorgis (2012) stated that the diversity of accounting principle has an essential impact on the stock markets, corporate management, and financial reporting. He pointed that when people seeking for international capitals, varies of dissimilar accounting principles create discrepancies in their financial reporting. If people cannot understand the differences between IFRS and GAAP, they may have the chance to make the wrong decisions and loss money in the capital markets. Pologeorgis (2012) also mentioned that international investors have to relearn the new principal in order to be more familiar with the international standards. Based on above, there is a keen motivation for people to understand the differences and similarities of GAAP and IFRS. This research will show business people the main similarities and differences of GAAP and IFRS.

The purpose of this paper is to describe what accounting convergence means and assess the likelihood of the convergence being completed and implemented in the next five (5) years. IFRS is the principle based set of standards that establish standards and dictate specific treatments. IFRS has become a global standard for companies when preparing financial statements. IFRS consist of multiple reports stated on the Wikipedia website. The two reports that will be discussed in the paper are IFRS and GAAP. GAAP is an Accounting Standard that provides guidance for financial

If IFRS takes place and is fully embedded as our primary standard of accounting, what would be the long-long term effect of convergence? Since, IFRS only applies mostly on publicly held companies. How it affects the accounting principles and standards for non-public held companies? How will public and private

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

Over a decade ago, it was believed that the whole world would likely adopt the Generally Accepted Accounting Principles (GAAP). At the point in time, the International Financial reporting Standards (IFRS) was only about ten years old. In the last decade, the IFRS has been adopted in many growing countries. Currently, it is anticipated that the U.S. will converge its GAAP with the international IFRS, leaving behind only a modified IFRS. This may occur as early as 2014.

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.

There are two sets of accounting standards that are used worldwide. One is the International Financial Reporting Standards (IFRS) and the U.S. Generally Accepted Accounting Principles (GAAP). There is a huge desire for there to one set of accounting standards worldwide with the increase of companies performing business in many different countries and global expansion.

When it comes to financial accounting, there are two sets of standards that seem to have incongruent rule and principal based views on the way things should be done. These standards include the Generally Accepted Accounting Principals (GAAP), which is rule based, and International Financial Reporting Standards (IFRS), which is principal based (Waybright p.260). Despite opposing views, the two have been attempting to fully converge since 2002. Historically, the concept of converging companies has been around since the 1950’s when the term harmonization was introduced. Harmonization was coined to “reduce the differences among accounting principals” (FASB). Then, in 1990, the term harmonization was replaced by convergence.

The generally accepted accounting principal (GAAP) and international financial reporting standard (IFRS) are standards governing how economic events are reported. In the United States, the Securities and Exchange Commission (SEC) relies on the FASB, the accounting standard-setting body of the US, to develop accounting standards that public companies must follow when publishing financial statements. On the other hand, many countries outside of the Unite States have adopted the International Financial Reporting Standard (IFRS) which

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.

For those in the business world, particularly in the accounting field, a major issue has surfaced in recent years relating to the differences between Generally Accepted Accounting Principles (GAAP) and the International Financial Reporting Standards (IFRS). Currently, the majority of countries in the world follow International Financial Reporting Standards guidelines; however, the United States still uses GAAP. This topic has been a main focus because there is a plan for convergence between the two frameworks in the near future. The United States accounting system will undergo drastic changes when this occurs, but

U.S GAAP refers to Generally Accepted Accounting Principles, which is a standard accounting principle mandated for private and public organizations in the United States. On the other hand, International Financial Reporting Standards (IFRS) is an accounting standard designed for companies operating internationally. While there are several similarities between the two accounting principles, there are still major differences. A valuation technique is one of the major differences between the US GAAP and IFRS.

With that being said, the Financial Accounting Standards Board has been working towards a convergence of IFRS and GAAP. This would make it much easier for business to conduct business on an international basis. Accountancy is a language, if the entire world spoke the same language, communication and understanding between different cultures would be simplified, leading to clearness and clarity. Business that operate internationally would not only run into trouble because they would have to follow two different sets of accounting principles and report two different sets of valid statements. This is no easy task, as the

The IFRS are superseding GAAP as the official reporting structure of many countries and as of July 2014, 283 have adopted the IASB’s new rule book (PricewaterhouseCoopers, 2014). The transition to IFRS has spawned a worldwide dialog of investors and analysts discussing the effects it will have on reporting and the implications this move carries into the future. This paper will review some financial reporting standards, the major distinctions between the U.S. GAAP and IFRS, and the competitive advantages and disadvantages of altering the U.S. reporting structure.

There are two major similarities or points of convergence between US GAAP and IFRS. The first similarity is with regards to objectives of financial. In this case, both IFRS and US GAAP take the same general position with regards to objectives of financial reporting. The two main objectives shared by the two accounting bodies are relevancy of