Accounting Principles And Financial Statements Essay
Unlike in GAAP, the IFRS, which is based on principles, may require firms to provide further explanations on their assets, debts and other elements. This will offer potential creditors and investors enough information, and help them understand our financial statements better. For instance, the notes will require to be elaborated further in the transition from GAAP to IFRS. Any legal implications of notes disclosure should be considered.
How Disclosures are Treated under GAAP
GAAP treats disclosure of contingencies losses using a codification, which called ASC 450. While FASB has been attempting to drive changes, letters from various interested parties have always derailed their efforts.…