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Comparison between IFRS and GAAP

Agustin Blanco

ACC 290

06/06/2016
Dan Jensen

Comparison between IFRS and GAAP

This paper provides a comparison between the International Financial Reporting Standards (IFRS) and the United States Generally Accepted Accounting Principles (GAAP) and how they are differentiate from each other in the format of financial statement, conceptual framework, and IFRS terms. There is also a description of some issues the SEC must consider in order to adopt IFRS in the United States as well as a comparison of the rules regarding revenue recognition under IFRS versus GAAP. There is an explanation of the definitions Under IFRS for revenues and expenses, as well as an explanation of the competitive implications (both pros and cons) of Sarbanes-Oxley Act (SOX).
Questions
IFRS 2-1: In what ways does the format of a statement of financial position under IFRS often differ from a balance sheet presented under GAAP? The main difference between the formatting of IFRS and GAAP statement of financial of position and a GAAP balance sheet is the ordering of liquidity. IFRS does not require a particular order or any classification of accounts. It is common for companies to report assets in reverse liquidity under IFRS. Instead, GAAP specifies and requires all a company’s account be classified and ordered based on liquidity. IFRS 2-2: Do the IFRS and GAAP conceptual frameworks differ in terms of the objective of financial reporting? IFRS and GAAP are very different, but the conceptual frameworks are the same. Both IFRS and GAAP require financial reporting be relevant and faithfully represented. Relevant information refers to data that is useful to investors, creditors, and regulators. Faithfully represented information should adhere to industry standards, and estimates are represented conservatively. IFRS 2-3: What...

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