In this order of ideas:
a. The primary financial statements requested under the GAAP and the IFRS are virtually the same
b. In terms of standards used for setting the environment, the IFRS use the standards of the IASB whereas the GAAP use the standards of FASB. The two boards implement similar means of setting the standards
c. The conceptual frameworks for IFRS and GAAP are highly similar
d. The recording process is the same for both accounting standards (double entry recording)
e. Both GAAP and IFRS require a balance sheet and an income statement and the balance sheets and income statements completed under two sets of principles are highly similar
f. The accounting and repotting of cash is virtually the same
g. Both GAAP and IFRS require strong internal control systems in order to comply with the accounting regulations
h. The accounting of receivables is virtually the same
i. In terms of the recording of intangible assets, the mechanisms in both GAAP as well as IFRS require the expense of costs in the research stage
j. Both GAAP and IFRS require economic agents to present their liabilities at the commencement of the balance sheet
k. The accounting of the issuance of stock to the shareholders is also similar
l. In terms of statements of cash flow, "both IFRS and GAAP require that the statement of cash flows have three major sections -- operating, investing and financing -- along with changes in cash and cash equivalents, and both permit use of the indirect or direct method" (Weygandt).
4. Risks of convergence
Just like any other international phenomenon, the convergence of the International Financial Reporting Standards and the Generally Accepted Accounting Principles is both...
Investors will have to adjust and discount IFRS figures, one additional dollar of IFRS profit indicates slightly lesser incremental economic health and, if the underlying assumptions of accounting are accepted, slightly lesser ability to pay down debt and pay dividends in the future than one dollar of income calculated under GAAP. Reaction Capital markets are becoming more global and demand for a single set of high-quality global accounting standards is increasing.
IFRS and GAAP Convergence Briefly describe Walmart The company establishment was in 1962 by Sam Walton. The company has grown through mergers and acquisitions to become the largest retail outlet in the globe. The main business of the company is corporate retail. The retailer offers a variety of products to its customers at a lower price compared to its competition. According to Fortune 500 ratings, the corporation ranks third among the largest
1-6 Summary The accounting convergence project of the FASB and IASB has proceeded slowly, despite a new deadline of 2014 from the SEC. There remain several key issues that are bogging down the conversion process. This dissertation will outline where American public companies stand on this issue. It will attempt to ascertain how much they understand about the convergence process and how prepared they are for full conversion to international financial
Herz (2013) notes that the end of convergence will essentially bring about an era where IFRS is, for the most part, the de facto standard around the world. However, the process has also compelled the IASB to be more responsive to its constituents. For Australians, involvement in ASAF signals the beginning of the final stages of convergence, where the remaining non-IFRS major economies are brought into the process. Many countries with
The impact of these changes will be far-reaching. Those engaged in the financial sector will feel that greatest impact. However, the impact of these changes will be felt by everyone, including the American public. They will feel the changes by greater transparency and the ability to compare financial statements with greater equitability. It is expected that the IFRS will increase public trust in the financial statements of companies. Much of
Financial Statement from GAAP to IFRSFinancial statements are prepared either in GAAP or IFRS. The translation of the financial statements from GAAP to IFRS implies that items within the incomes statement as well as the balance sheet will be treated in a different way. The items within the income statement and the balance sheet are treated using different rules and approaches under the different accounting approaches. The item selected in
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