What is the difference and similarity between GAAP and IFRS PDF?

US GAAP requires that fixed assets are measured at their initial cost; their value can decrease via depreciation or impairments, but it cannot increase. IFRS allows companies to elect fair value treatment of fixed assets, meaning their reported value can increase or decrease as their fair value changes.

Which of the following statements regarding IFRS and U.S. GAAP is correct?

The correct option is (C). International Financial Reporting Standard (IFRS) is based on principles. GAAP is a rule-based standard of accounting.

What is the difference between GAAP and IFRS on inventory?

GAAP permits the use of all three of the most common methods for inventory accountability; the IFRS forbids the use of the LIFO method. IFRS requires that inventory is carried at the lower of cost or net realizable value; U.S. GAAP requires that inventory is carried at the lower of cost or market value.

Are IFRS better than US GAAP?

U.S. GAAP: An Overview. At the conceptual level, IFRS is considered more of a principles-based accounting standard in contrast to GAAP, which is considered more rules-based. By being more principles-based, IFRS, arguably, represents and captures the economics of a transaction better than GAAP. Click to see full answer

Which is better GAAP or IFRS?

Local vs. Global.

Rules vs. Principles.

Inventory Methods. Both GAAP and IFRS allow First In,First Out (FIFO),weighted-average cost,and specific identification methods for valuing inventories.

Inventory Write-Down Reversals.

Fair Value Revaluations.

Impairment Losses.

Intangible Assets.

Fixed Assets.

Investment Property.

Lease Accounting.

How to convert GAAP to IFRS?

Converting between US GAAP and IFRS involves a number of steps, including: Conversion approach. Accounting policy. Data gaps. Conversion adjustments. GAAP reconciliation. System and process changes. Financial reporting. Conversion audit.

How do GAAP and IFRS differ in revenue recognition?

Your company must identify the contract with the customer.

You must then identify the performance obligations as outlined in the contract.

Your business must determine the transaction price or the amount to which you expect to be entitled after the transfer of goods or services.