Q.1 as the international business including all commercial transactions between two or more parties. “standardization, globalization, exchange rate, tax rate and the discount rate” are effecting the accountants and firms weather being large or small firms.
Conducting the business transactions in any foreign country or entity create a unique challenge for payment process. Such as, the balance of payments, which is an accounting record of the transactions between any two countries or more. As any accounting system the judgment must be made about the classification of the transaction and the result of standardizing. As the row data is made by the individual countries it could not by reliable as the both of individuals and government are preparing …show more content…
For example, in the property, plant and equipment, GAAP basis focus on historical cost only without take in consideration the revaluation cost. on the other hand, IFRS uses weather revaluation option or the historical …show more content…
On the other hand, to classify any tax asset/Liability is either short or long term depending on the relationship on time differences. IFRS deferred tax assets and liabilities are always recorded as long term.
Q.2 The General differences between GAAP and IFRS: IFRS GAAP
Principle and Rule based Principle based: depends more on the facts. Rule- based: the research concentrated more on the literature
Providing the details Less comprehensive than GAAP Comprehensive details
Fair value: IFRS has limit guidance to determine the fair value. GAAP includes particular guidance on fair value measurement
Property, plant and equipment: Using either revaluation cost or historical amount which are not in GAAP model. In case of using revaluation option it’s based on fair value at the date of the evaluation minus any subsequent accumulated depreciation and accumulated impairment losses. The companies in revaluation option can choose either model of a class of assets that must be stated at their fair value.
Examples: Land, buildings, machinery, furniture, fixtures and office equipment . Using the historical cost, but revaluations are not
Conducting the business transactions in any foreign country or entity create a unique challenge for payment process. Such as, the balance of payments, which is an accounting record of the transactions between any two countries or more. As any accounting system the judgment must be made about the classification of the transaction and the result of standardizing. As the row data is made by the individual countries it could not by reliable as the both of individuals and government are preparing …show more content…
For example, in the property, plant and equipment, GAAP basis focus on historical cost only without take in consideration the revaluation cost. on the other hand, IFRS uses weather revaluation option or the historical …show more content…
On the other hand, to classify any tax asset/Liability is either short or long term depending on the relationship on time differences. IFRS deferred tax assets and liabilities are always recorded as long term.
Q.2 The General differences between GAAP and IFRS: IFRS GAAP
Principle and Rule based Principle based: depends more on the facts. Rule- based: the research concentrated more on the literature
Providing the details Less comprehensive than GAAP Comprehensive details
Fair value: IFRS has limit guidance to determine the fair value. GAAP includes particular guidance on fair value measurement
Property, plant and equipment: Using either revaluation cost or historical amount which are not in GAAP model. In case of using revaluation option it’s based on fair value at the date of the evaluation minus any subsequent accumulated depreciation and accumulated impairment losses. The companies in revaluation option can choose either model of a class of assets that must be stated at their fair value.
Examples: Land, buildings, machinery, furniture, fixtures and office equipment . Using the historical cost, but revaluations are not