Comparing IFRS to GAAP
Albert Payne
ACC/290
11/14/2014
Daniela Trudel

Comparing IFRS to GAAP

This paper looks at relevant comparisons of IFRS, “International Financial Reporting Standards” and GAAP, “Generally Accepted Accounting Principles”. These two frameworks of accounting principles and practices share a lot of standards and procedures, but also differ on accepted policies. This paper will answer those standards and differences but also show the comparison of the two.

Let’s look at what ways does the format of a statement of financial or position under IFRS often differ from a balance sheet presented under GAAP. IFRS “International Financial Reporting Standards” doesn’t command a precise order of …show more content…

Nevertheless it doesn’t contain non-operating gains. This would applies likewise to expenses where loses don’t include non-operating activities. Let’s compare and contrast the rules regarding revenue recognition under IFRS versus GAAP. With GAAP, you can use cash-basis or accrual basis accounting for revenue recognition. Cash basis, revenue is recognized when a payment is received. Using accrual basis accounting, income is recognized when it becomes economically important. IFRS has less rules with revenue recognition, nevertheless it follows the same principle of economic importance. Income can be recorded when it is likely that future profit related to the item of revenue will flow to the person and it can be measured consistently.

Reading this article by Bloomberg about these two agencies and their potential to merge their practices and policies in the near future. “Bloomberg”,
“http://bnasoftware.com/Software_Resource_Center/Articles/IFRS_Versus_GAAP_Potential_Convergence_of_Competing_Standards_Could_Transform_Fixed_Assets_Management.asp © 2014 BNA Software, a division of Tax Management Inc. All Rights Reserved. | Bloomberg BNA.”
“More than 100 countries have adopted the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). Meanwhile, in the U.S., companies continue to rely on Generally Accepted Accounting Principles (GAAP) issued by the Financial Accounting Standards Board (FASB). Efforts to