Theu.s. Gaap And Ifrs

The five research articles I have chosen to further my research on the convergence between U.S. GAAP and IFRS are The Implication of US GAAP and IFRS Convergence on American Business by Austin Willmore (2015), IFRS adoption by country by PWC (2015), International Financial Reporting Standards and American Generally Accepted Accounting Principles: the Convergence Lessons by Kuzina (2015), The economic impact of IFRS - a financial analysis perspective by Seay (2014), and Accounting for Leases The New Standard by CPA Journal (2016). These articles are related to my topic, where these researchers researched and analyzed the financial statement reporting on convergence of the U.S. Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS), and certain accounts when adopting IFRS present a different result in the financial reporting for U.S. reporting companies when U.S. GAAP standards combined with IFRS. Also, these research articles discuss the existence of two systems of standards, U.S. GAAP and IFRS; and the issue and difficulty of the process to fully converge.

Implementing GAAP and IFRS will reduce huge transition cost that may occur in the future. Due to this difference between GAAP and IFRS, the transition cost from GAAP to IFRS is very high. If a company wants to change accounting reporting method, it must report the current year, pervious year or years depend on the situation and the first year started to report financial statements using the new-implemented method (Kieso Et al., Chap. 5, ETB). It cost a lot for the company to do so.

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

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.

International Reporting Standards (IFRS) are standards that are aimed as a global language that is common for affairs of business, to make sure that the accounts of the company can be understood and are of a certain standard that applies worldwide. IFRS are

IFRS 2-1: In what ways does the format of a statement of financial of position under IFRS often differ from a balance sheet presented under GAAP?

On February 24, the SEC unanimously agreed to publish a statement of continued support for a single set of high-quality global accounting standards. The SEC acknowledged that IFRS is best positioned to be the global standard. Even without a set conversion timeline from the SEC, IFRS has been affecting

Through this course we have been taking a closer look into the Generally Accepted Accounting Principles (GAAP) and the International Financial Reporting Standards (IFRS). The book lays out the major similarities and differences between the two separate but equal accounting methods. I say, “Equal”, in the sense that the IFRS and GAAP accounting methods are two different ways that the any company that could come to the conclude the financial statements for any such accounting period. The differences that have apparent between the two methods, GAAP is only used in companies that have been started in the United States, whereas internationally IFRS has been adopted by those prospected companies.

Countries, including the US, that decide to converge with IFRS yet function under different economic and political environments will inherently implement the universal standard to fit their institutional infrastructures diminishing comparability between nations (Hail). There are significant differences in the foundation of US GAAP and IFRS, specifically IFRS’s principles-based accounting and US GAAP’s

The US Generally Accepted Accounting Principles (GAAP) is a set of international accounting rules which originated from the United States. US GAAP can be defined as a set of accounting principles, standards and procedures that companies use to compile their financial statements (Elliott & Elliott, 2008). The International Financial Reporting Standards (IFRS) on the other hand are accounting rules originating from the United Kingdom. International Financial Reporting Standards (IFRS) are a set of accounting rules designed with a common global language for business affairs so that financial accounts of companies are understandable and comparable across international boundaries (Devinney, Pedersen & Tihanyi, 2010).

With complete notion and awareness of how each country has their set of rules, “the goal of IFRS is to provide a global framework for how public companies prepare and disclose their financial statements” (Rouse, 2011). This view is meant to provide general guidelines, as well as international comparisons through conventional and edifying means. To bring broader and vivid objectives, IFRS replaced IAS, the older standards, in order to bring a more comprehensive and simplified accounting procedures.

One of the most notable debate that is being going on in the business industry for over a decade is the convergence between IFRS and USGAAP. Most of the countries uses IFRS for representing their financial statement except US. US is one of the global business leader and having US follow IFRS is so necessary that a business can represent its financial statement on the same basis of foreign nations and it is also easy to benchmark. Though most of the countries follow IFRS, the

There are quite a few similarities between IFRS and US GAAP and the differences are rapidly getting reduced owing to the convergence agenda. The differences are seen in revenue recognition, expense recognition, arena of financial liabilities and equity, criteria for consolidation, method of costing inventory, contingencies, debt covenant violations. The main difference between GAAP and IFRS is that GAAP is based on rules, while IFRS is based on principles.