The Functional Currency

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

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

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.

Journal written by Robert G.Rulland from Northeastern University and Timothy S.Dauprik from Univesity of South Carolina discussed about the foreign currency translation and behaviour of exchange rate. Consequently, the first controversy is which translation method provides the most meaningful translation gains and losses, for example which method provides the most reasonable measure of the foreign entity's exposure to movements in exchange rates. The second controversy is whether translation gains and losses should be reported in the income statement or whether they should be deferred and shown in the stockholders' equity section of the balance sheet. Two major controversies exist in the translation of foreign currency financial statements is first which translation method should be used, and the second is how should the resulting translation gains and losses be reported. When items translated at current exchange rates, translation gains and losses result. Translation methods vary as, to which balance sheet items translated at current and which at historical exchange rates. This paper proposes two criteria for settling these questions which are based upon the actual pattern of exchange rates existing between the U.S. dollar and other currencies .It is argued that application of these criteria would result in a more objective and economically meaningful translation process than exists under current rules.

IFRS is similar in concept to that of GAAP. IFRS is unique in that is applies to more international countries. The IFRS was

However, despite best efforts, the transition will still cause some problems with relation to changeover costs and increased training, particularly for current users of US GAAP. Therefore, despite the process being one which is expected to be beneficial to many and establish a significant improvement in harmonisation, there will still be some difficulties in regards to financial reporting that companies in the US may face. The main aim of this research is to critically assess the convergence of IFRS and US GAAP from the point of view of the US, and evaluate the alterations in financial reporting standards that will cause problems for companies and consumers in the US

Items presented in the financial statements of each of the Group`s entities are measured using the functional currency. IPL’s presentation currency is the Australian dollar, the currency used to present its consolidated financial statements. Foreign currency transactions are translated into the functional currency at the exchange rate on the day the transaction occurs. Foreign exchange gains and losses are recognised in the statement of comprehensive income, except when they are `deferred in equity as qualifying cash flow hedges`. These have been calculated following the AASB 121 `The effects of changes in Foreign exchange rates` and AASB 139 `Financial instruments – recognition and measurement`.

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.

The financial statements required by IFRS and US GAAP are: a statement of financial position, a statement of profit or loss and other comprehensive income, a statement of changes in equity, and a statement of cash flows. Both entities also require notes that include the accounting policies used when preparing their financial statements, but US GAAP users are allowed to disclose their changes in owner’s equity in their financial notes or on a statement of changes in equity. When presenting these financial statements, IFRS requires comparative financial statements from the previous period, and a statement of financial position from the beginning of the previous period. US GAAP does not require comparative financial statements, but the SEC requires comparative financial statements for the three previous periods (IFRS compared, 2015). I do not think US GAAP

There are several regulatory bodies, both national and international, that controls the accounting system of companies. The United States General Accepted Accounting Principles (GAAP) is a rules-based accounting body that provides guidelines on how US firms accounting systems should operate. On the other hand, International Financial Reporting Standards (IFRS) is principles-based international regulatory guidelines used internationally. Revenue recognition by the two bodies differ greatly making the (Shamrock, 2012)

To understand the intricacies of transitioning to IFRS from the U.S. GAAP one must understand what both are. The U.S. GAAP is derived from a combination of standards and principles that are the preferred practices established in the U.S. The main governing bodies of the U.S. GAAP are the Financial Accounting Standards Board (FASB) and the Securities and Exchange Commission (SEC) . These two governing bodies work to ensure the standards of the U.S. GAAP are both relevant and faithfully represented (Wahlen, J. M., Jones, J. P., & Pagach, D. P. 2013).

GAAP is known as Generally Accepted Accounting Principle, and it is an accounting standard used in the US approved by the U.S. Securities and Exchange Commission (SEC). On the other hand, IFRS is an International Financial Reporting Standards. It is an accounting standard that is commonly used in many parts of the world such as the European Union, Asia, and South America, and some of the U.S companies slowly adopt IFRS(Diffen). The purpose of IFRS to create a universal accounting rule or common language for businesses to understand especially for a foreign investor to understand international accounting standard or the same accounting language. It is considered to be opened an opportunity for new capitalist countries, for instance, China.

IFRS and GAAP both insist on information being faithfully represented and relevant. Faithfully represented data consistently adheres to proper trade standards and is conservatively reported. Any financial information that is deemed important to the users of an organization’s financial statement is considered relevant and should always be included. There are many similarities between the two

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 differences between GAAP and IFRS with respect to the accounting for liabilities.

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