I will provide examples, which will discuss the benefits to use IFRS instead of GAAP. Even though there differences may play a big role in investors and individual preparers routines, I will give examples that could have a more importance or widespread financial reporting impact by using the IFRS method. Finally, this paper will conclude the differences and similarities between the U.S. GAAP and IFRS. IFRS is one-strategy investors or individual preparers can you use in the accounting profession. IFRS has different functions and different rules compared to GAAP. This paper will go through all these questions in order to consider if IFRS should be implemented in the future for U.S. accounting companies.
GAAP stands for (US Generally Accepted Accounting Principle) which is a common accounting method used in the U.S., where as IFRS stands for (international financial reporting standard) and this method of accounting is developed by (IASB). IFRS is the method used in different countries throughout the world. IFRS is a method known to be principle based, where as GAAP is known to be rules based. IFRS has a lot to offer to US companies...
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...provide a more consistent reporting. It provides flexibility for both investors and compliance and of course having a single standard for financial reporting for all countries makes it less complicated. Also having a uniform structure that doesn’t change from country to country.
Many corporations weather US or Global; big or small, public or private, have adopted different accounting practices which have consequences to business owners, investors stockholders, managers and corporations. Over recent years, many countries are gearing towards and trying to converge the two practices between International Financial Reporting Standards as one standard to allow simplified financial reporting and eliminating the need for conversion. The International Accounting Standards Boards (IASB) is trying to bridge the gap between these two accounting standards into one standard.
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