Essay on Ifrs Vs Gaap Vs. Ifrs

826 Words Aug 10th, 2014 4 Pages
GAAP vs. IFRS In terms of making a distinction between both the IFRS and U.S. GAAP it is worth mentioning that there are several similarities between IFRS and GAAP in regards to the presentation of financial statements. Both standards have the statement of financial position, a profit and loss statement, a statement of comprehensive income, a statement of cash flows and notes to the financial statements. Both the IFRS and GAAP standards require for there to be information available and presented when there are changes made to the shareholder’s equity. In general, both standards are consistent and show the same materiality when it comes to the way the financial statements are being prepared. One of the significant differences in the treatment of certain costs in intern periods is that the GAAP is viewed as an integral part of an annual report. Due to this view, certain costs that benefit more than one interim period maybe allocated among those period, resulting in either a deferral or accrual of certain costs. With IFRS, each interim period is viewed as a discrete reporting period. A cost that does not meet the definition of an asset at the end of an interim period is not deferred or accrued. In this case, a liability must be recognized at an interim reporting date to represent an existing obligation. In terms of contingencies, we must note that there are several differences in assets and liabilities arising from contingencies between both standards. Initial recognition…

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