Comparing Ifrs to Gaap - Accounting 290 Paper

760 WordsAug 23, 20144 Pages
; IFRS vs. GAAP Jonathan Brown ACC/290 July 29, 2014 Wendy Ulrich This paper will explain the differences when comparing the United States Generally Accepted Accounting Principles (GAAP) and the International Financial Accounting Standards (IFRS). One difference is that the IFRS does not dictate a detailed order or arrangement of accounts on the statement of financial position. Reporting assets in reverse order seems to be what companies do regularly. The GAAP explicitly requires that all accounts be ordered based on their level of liquidity. So, cash is usually reported first and non-current assets will be stated last. GAAP and IFRS maintain very similar perspectives on the fairness of financial data. Both of these respected bodies approve that financial reporting data should be relevant and faithfully represented. Information that is relevant is anything that could be viewed as useful in the eyes of a creditor, investor, or regulator. Information that is faithfully represented should conform to industry ethics and any estimates should be traditional in nature (Wiley}. Do the IFRS and GAAP conceptual frameworks differ in terms of the objective of financial reporting? The answer is no. What terms commonly used under IFRS are synonymous with common stock and balance sheet? The balance sheet is identical to the Statement of Financial Position and the common stock is typically shown as Share Capital Ordinary on IFRS financial statements. Some of the issues the SEC must consider in deciding whether the United States should adopt IFRS is that first, the SEC must deliberate the overall costs impact this will have on businesses and that it is likely that it would cost billions of dollars in new reporting expenses for U.S. corporations to implement IFRS. It would also be requiring accounting firms to greatly change their education requirements. Second, the SEC’s

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