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Ifrs vs. Us Gaap

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IFRS vs. GAAP

Introduction
The U.S. GAAP is accounting principles adopted by the U.S Securities and Exchange Commission (SEC). Over time SEC has been talking about moving these principles over to the IFRS, The International Financial Reporting Standard. “IFRS is an accounting standard that was developed by a not-for-profit group called the International Accounting Standard Board. (www.Ifrs.com)” This summary will give you a subject by subject look of some differences and similarities both the IFRS and the GAAP carry.
IFRS 2-1: In what ways does the format of a statement of financial or position under IFRS often differs from a balance sheet presented under GAAP?
Accounting follows the double entry standard where transactions are broken down into sections, revenue or expenses, assets or liabilities. Under IFRS, it does not dictate a particular order of accounts on the statement of financial. Usually, companies report their assets in reverse order of liquidity. For example, you would start with long term assets and work your way down to current liabilities. Under GAAP, it requires that all accounts be in order of their liquidity. Cash is usually reported first and non- current assets would be listed last. With these differences financial reporting results would be different for companies.
IFRS 2-2: Do the IFRS and GAAP conceptual frameworks differ in terms of the objective of financial reporting? Explain.
No, IASB and FASB conceptual frameworks are organized in similar ways; they both agree that the objective of financial reporting is to provide useful information to investors and creditors. When developing a standard conceptual framework both parties should look at issues such as, characteristic of relevance be traded off in favor of information that is verifiable and should single measurement methods be used.
IFRS 2-3: What terms commonly used under IFRS

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