Comparing Ifrs to Gaap Case
Comparing IFRS to GAAPGenevieve R PattersonACC/29004/20/2015Kimberly ManschComparing IFRS to GAAP When dealing with financial practices GAAP is mainly used in the US while IFRS is used in internationally. In the US we use our standard basis as more of rules to follow whereas internationally they use financial practices are principles. Both methods are okay to use the US should be looking more into using the IFRS principle based in the near future real soon. The ways of formatting of a statement of financial or positions under the IFRS differ from the balance sheet presented under GAAP is the IFRS does not require a specific formatting in a specific order of accounts, but rather report the assets in reverse. The GAAP has a certain way of how all the accounts are arranged for example the high will be listed first like cash and shareholder equity will always be listed last. Both the GAAP and IFRS are conceptual frameworks of the objective of financial reporting the reason being is because the two both are in command of relevancy and ethical
representation of the information that they come across. Relevant data is important to users and faithfulness follows standards or quality. The only difference is that IFRS puts more focus on the relevance of other countries, while GAAP is focused on the US. The terms that are commonly used under the IFRS are synonymous with common stock and balance sheet are the statement of financial position which is bluntly for balance sheet. Balance sheets are summaries of a company’s assets, liabilities and shareholders equity. Share Capitol ordinary is the same as common stock when the IFRS is viewing the financial statements. Which means the equity ownership in a company and it entitles the owner to vote under certain circumstances to show their percentage of ownership of a company. Some of the issues that SEC must consider in deciding to get the US to adopt the IFRS of accounting principles is that the cost may be impacted tremendously on all businesses and also it will cost maybe billions for the US to implement and collaborate on using the IFRS to make it effective as well as put it to work to be effective and penetrate it. Also lost of education requirements will definitely be impact. Lastly SEC job is to protect investors from fraud on all publicly transactions. The rules regarding revenue recognition under the GAAP is that it’s very well possible to use the cash basis or the accrual basis accounting because under the cash basis revenues is recognized when payment are received and under the accrual basis the revenues is only noticeable when it becomes very important to us that we care about it to a significance., but