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Acc/290 Ifrs vs Gaap

In: Business and Management

Submitted By Twins2015
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Comparing IFRS to GAAP

ACC/290
7-14-2015
Howard Pickering

Comparing IFRS to GAAP
As International business increases, those with financial responsibilities should be well versed in the two primary accounting methods: GAAP (Generally Accepted Accounting Principles) and IFRS (International Financial Reporting Standards). The Financial Accounting Standards Board set the GAAP which is primary used in the United States and the IFRS is used in several other countries. If the United States where to every switch to IFRS, they would need to get a good understanding of the difference and acknowledge the similarities. This will only make for better business decisions. “The IASB and FASB are working on a project that would rework the structure of financial statements. Specifically, this project will address the issue of how to classify various items in the income statement. A main goal of this new approach is to provide information that better represents how businesses are run. In addition, this approach draws attention away from just one number—net income. It will adopt major groupings similar to those currently used by the statement of cash flows (operating, investing, and financing), so that numbers can be more readily traced across statements.” (Wiley, 2013)
IFRS 2-1: In what ways does the format of a statement of financial or position under IFRS often differ from a balance sheet presented under GAAP? The GAAP requires accounts to be listed in a specific order based on liquidity. Cash would be reported first, shareholder equity, non-current assets would be reported last.
IFRS 2-2: Do the IFRS and GAAP conceptual frameworks differ in terms of the objective of financial reporting? Explain. IFRS and GAAP both take the same general position in regards to objectivity in financial reporting. The two main positions they governing bodies share are the relevancy and...

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