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US GAAP Vs IFRS

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US GAAP vs. IFRS
To be successful in the US capital markets, it is increasingly becoming important to be financially bilingual; you have to speak both IFRS and GAAP. Since we operate in a global marketplace, the impact of IFRS on US capital markets are not just about domestic use in capital filings. IFRS requirements elsewhere in the world affect may US companies, public or private, large or small, through cross-border, and M&A activity; due to the IFRS reporting demands of stakeholders outside the U.S., the continued global adoption of IFRS means that the impact on multinational US businesses will only grow stronger, as additional countries permit or require IFRS for statutory reporting purposes and public filings. From an investors perspective, …show more content…

Generally accepted accounting principles, or GAAP, are the common set of accounting standards in the U.S. GAAP was issued by the American Institute of Certified Public Accountants (AICPA) and is a subject to Securities and Exchange Commission regulations. The AICPA first created the Committee on Accounting Procedure in 1939 and replaced that with the Accounting Principles Board in 1959. In 1973, the Accounting Principles Board was replaced by the Financial Accounting Standards Board (FASB) under the supervision of the Financial Accounting Foundation, with the Financial Accounting Standards Advisory Council, serving to advise and provide input on the accounting standards. Other organizations involved in determining the United States accounting standards include the Governmental Accounting Standards Board (GASB), formed in 1984; also, the Federal Accounting Standards Advisory Board (FASAB), formed in 1990. In 2008, the Securities and Exchange Commission issued a preliminary "roadmap" that may lead the United States to renounce Generally Accepted Accounting Principles in the future, and join more than 100 countries around the world instead, in using the London-based International Financial Reporting Standards. As of 2010, the convergence project was underway with the FASB, meeting routinely with the IASB. The SEC expressed their aim to fully adopt International Financial Reporting Standards in the U.S. by 2014. With the convergence of the U.S. GAAP and the international …show more content…

Both standards generate purposive information that can be used by investors in making investment decisions. Similar to US GAAP, IFRS provide timely, useful and reliable information for the users of financial statements using accrual basis of accounting. However, there are still differences between the two standards for recognition, measurement and presentation of specific transactions and events. A major difference between GAAP and IFRS accounting is the methods used to evaluate the accounting process. GAAP is more detailed, or rule-based, while IFRS is principles-based and more flexible in its accounting and disclosure requirements. Also, as it was mentioned before IFRS is a globally accepted standard for accounting, and is used in more than 115 countries, while GAAP is exclusively used within the United States (Kieso, Donald E., et

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