Disadvantages Of IFRS Vs GAAP

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Having a career in accounting, means having set rules and standards to follow by. In the accounting profession, GAAP has been well known and widely used more often in the U.S. Through out the world IFRS is being used except in the U.S. In the U.S., GAAP is a more common method for accounting. In this paper, I will analyze which form of accounting is preferable, from principle based (IFRS) vs. Rules based (GAAP). My research will conduct of the similarities and differences in the accounting field, between the two. Also, I will consider the benefits and disadvantages of using one method over the other. 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…show more content…
As mentioned earlier in this paper the primary difference is that IFRS and GAAP comes done to rule or principle based which as an obstacle regarding consolidation. IFRS doesn’t consider LIFO for inventory as compared to GAAP, which allows all three options. To conclude their will always be talks and debates about weather or not the convergence of international Financial Reporting Standards and Generally Accepted Accounting Principles will happen. Through out the world IFRS is being used except in the U.S. In the U.S., GAAP is a more common method for accounting. In this paper, I analyzed which form of accounting is preferable, from principle based (IFRS) vs. Rules based (GAAP). My research conducted of the similarities and differences in the accounting field, between the two. Also, mentioned the benefits and disadvantages of using one method over the…show more content…
The advantage points of conversion to IFRS in the sates are that it will 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
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