What is the meaning of GAAP and IFRS? GAAP is the abbreviation for generally accepted accounting principles. Which is the values and guidelines pointed out by the Financial Accounting Standards Board (FASB). IFRS stands for International Financial Reporting Standards which intel’s the accounting standards developed by the International Accounting Standards Board (IASB). Which is the global standard for the planning of shared company financial statements.
The start of the U.S. GAAP and IFRS was the concept in the late 1950’s during world war II. The economic integration increased across borders of the capital movements throughout the world. The key emphasis on harmonization is to reduce the differences in accounting standards used in the major …show more content…
FASB monitoring of IASB projects,
5. Convergence Project and
6. Explicit consideration of convergence potential in all Board agenda decision (Forgeas, 2016).
There are certain differences between General Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) is GAAP is rule-based and the main accounting standard used in the U.S., where IFRS is the main structure for the accounting standard used in most countries around the world.
Some of the key differences between IFRS and the GAAP are;
IFRS- is used in more the 110 different countries around the world. GAAP is more “principle based” for all the accounting standards. Because, IFRS is more of a “ruled based” and it signifies and captures the economic side of all transactions better than GAAP
GAAP- is more “rule based
• Consolidations of IFRS which is the control model where GAAP supports the chances and reward model. Some entities are combined in accordance with FIN 46(R) and may be shown individually under IFRS.
• Statement of Income under IFRS is where the extraordinary items are not separated in the income statement. Whereas in GAAP, they are shown beneath the net income.
• IFRS will not allow debt violations at the end of the fiscal …show more content…
Corporate Management Impact Benefits from streamlined standards, instructions and practices which pertains to all countries worldwide. The change will afford corporate management the opportunity to raise capital via lower interest rates while lowering risk and the cost of doing business.
Investors impact Today’s Investors should educate themselves by understanding the accounting finances and reporting statements that follow the new international standards. Together, the procedure will stipulate a more reliable source of information to be streamlined minus the need of alteration to the standards of any nation. More so, the latest standards should prosper flow of money.
Stock Markets Impact will have a decline in costs complementing the foreign exchange along with the markets that follow the same rules and standards. This shall allow markets to contend internationally for global investment.
Accounting Standards Setters
The start of the U.S. GAAP and IFRS was the concept in the late 1950’s during world war II. The economic integration increased across borders of the capital movements throughout the world. The key emphasis on harmonization is to reduce the differences in accounting standards used in the major …show more content…
FASB monitoring of IASB projects,
5. Convergence Project and
6. Explicit consideration of convergence potential in all Board agenda decision (Forgeas, 2016).
There are certain differences between General Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) is GAAP is rule-based and the main accounting standard used in the U.S., where IFRS is the main structure for the accounting standard used in most countries around the world.
Some of the key differences between IFRS and the GAAP are;
IFRS- is used in more the 110 different countries around the world. GAAP is more “principle based” for all the accounting standards. Because, IFRS is more of a “ruled based” and it signifies and captures the economic side of all transactions better than GAAP
GAAP- is more “rule based
• Consolidations of IFRS which is the control model where GAAP supports the chances and reward model. Some entities are combined in accordance with FIN 46(R) and may be shown individually under IFRS.
• Statement of Income under IFRS is where the extraordinary items are not separated in the income statement. Whereas in GAAP, they are shown beneath the net income.
• IFRS will not allow debt violations at the end of the fiscal …show more content…
Corporate Management Impact Benefits from streamlined standards, instructions and practices which pertains to all countries worldwide. The change will afford corporate management the opportunity to raise capital via lower interest rates while lowering risk and the cost of doing business.
Investors impact Today’s Investors should educate themselves by understanding the accounting finances and reporting statements that follow the new international standards. Together, the procedure will stipulate a more reliable source of information to be streamlined minus the need of alteration to the standards of any nation. More so, the latest standards should prosper flow of money.
Stock Markets Impact will have a decline in costs complementing the foreign exchange along with the markets that follow the same rules and standards. This shall allow markets to contend internationally for global investment.
Accounting Standards Setters