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Ifrs and Gaap

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IFRS and GAAP Comparison


December 8, 2014
Cameo Christopher

IFRS and GAAP Comparison

The two most widely known accounting standards used are the International Financial Reporting Standard or (I.F.R.S.) and the U.S. Generally Accepted Accounting Principles or (G.A.A.P.) The IFRS is used in more than 110 countries worldwide where the GAAP is generally used only in the United States. Every accountant around the globe is familiar with these accounting standards. These two accounting standards have similarities and differences that will be brought to light. We will also discuss the liabilities between the two and how the two accounting standards tie into Financial Accounting Standard Board and International Accounting Standard Board.
IFRS 8-1 The Financial Accounting Board and the International Accounting Standards Boards both work together to develop and re-enforce the financial reporting standards for publicly held companies. In order to move fair value measurement for financial instruments certain steps need to be taken. One step is related guidance on measurement and enhanced disclosure requirements to inform financial statement users about the fair value measurements included in the financial statement. There are different standards for fair value measurements between the United States and other countries. Component depreciation is very important for companies in the United States and across the globe. Component depreciation is when an asset has fundamentally different parts that should be depreciated with different treatment. Under the IFRS, firms are required to use component depreciation if the parts of the asset offer varying patterns of benefit. The reasoning behind this is that it provides a clear picture of the asset’s book value. This method is also permitted under GAAP but United States companies rarely use it in…...

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