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International Financial Reporting Standards

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International Financial Reporting Standards

The application of IFRS is spreading all over the world as a result of the development of world economy and increasing transactions among countries and nations. For many years, even now, different countries have different account standards, such as U.S. GAAP, Japan GAAP, and IFRS are mainly adopted by European countries. In recent years, many countries accepted or acknowledged standards used in other countries. In America, for example, the SEC issued that it is possible to adopt IFRS in November 2008 and SEC stated that IFRS is the high quality global accounting standards in February 2010.

IFRS, short for International Financial Reporting Standards, are the principles developed by the International Accounting Standards Board (IASB). Nowadays, “it is becoming the global standard for the preparation of public company financial statements.”(Ervin Black) Parts of standards of IFRS are based on International Accounting Standards published by the Board of the International Accounting Standards Committee between 1973 and 2003. “On April 1st, 2001, the new IASB took over from the IASC the responsibility for setting International Accounting Standards. During its first meeting the new Board adopted existing IAS and SICs. The IASB has continued to develop standards calling the new standards IFRS.”(Geoffrey Whittington)

U.S. GAAP, short for the Generally Accepted Accounting Principles, is more widely accepted in United States. However, SEC announced that they will continue supporting establishing global accounting principles and considered that IFRS is the first choice.

When compared to GAAP, IFRS provides less detail than GAAP does that is the overall biggest difference. For instance, IFRS provides much less information about revenue recognition than GAAP does. Also, IFRS does not have those much specific

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