In relation to inventory, last in first out method is an acceptable method under US GAAP. In the case of IFRS, last in first out method is prohibited. Under US GAAP, it is not important to apply the same cost formula for all the inventories which are similar in nature. Under IFRS, it is important to apply the same cost formula for all the inventories which are similar in nature in the entity.
In the case of US GAAP, the expenses of the organization are recognized at the time when, the expenses are incurred irrespective of the fact that, whether money has been spent on the expenses or not. In the case of US GAAP, different categories of expenses are recognized in different ways for the organization. The organizations will consider the type of expenses and provide results accordingly.
In the case of US GAAP, once the management of the organization has made the commitment to a detailed exit plan the organization determines each cost to be recognized regarding the time of recognition (IFRS and US GAAP: Similarities and Differences, n.d.). If there is involuntary employee termination cost then these costs are recognized over period of future service. In case of IFRS, the costs are recognized earlier in comparison to US GAAP as it considers the exit plan as a whole.
Costs Included In Inventory
In relation to the cost included in inventory, under US GAAP, inventory is taken into consideration at lower value of cost of market price. In the case of IFRS, inventory is measured at lower of cost of inventory or net realizable value. The cost of the inventory is taken into consideration for the purpose of determining that whether the organization will be in the position to have the recognition of inventory in a proper manner.
Property, Plant and Equipment
In relation to property, plant and equipment, there are various kinds of similarities in both the concepts. The recognition of cost is made at an initial level...