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Comparison between International Financial Reporting Standards and Generally Accepted Accounting Principles
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The International Financial Reporting Standards (IFRS) is an accounting standard that is used by more than one hundred and ten countries. On the other hand, the Generally Accepted Accounting Principles (GAAP) are mostly used in the United States. The two main accounting systems are important in accounting. Most countries have their own systems and conform to these two accounting systems. The Generally Accepted Accounting Principles are set by the Financial Accounting Standards Board (FASB) and International Financial Reporting Standards are set by the International Accounting Standards Board (IASB), (Stickney & Weil, 2006).
IFRS 8-1: Fair Value Measurement
Several steps have been taken by the two administrations, Financial Accounting Standards Board and the International Accounting Standards Board, to fair value measurements for financial instruments. The approaches taken by the two boards are differed in some ways. Fair value measurements provide employers with an exact representation of the worth of a firm’s properties (Stickney & Weil, 2006). Firstly, both systems require businesses to include evidence on fair value measurement carried out in financial statements. Additionally, they need firms to report assets, depending on the events, at either book value or fair value. Their recourses should receive the same estimation statement if they are of the one class. On the other hand, the International Financial Reporting Standards advocates for a two tiered technique that mainly analyses separate receivables and looks at receivables in full to conclude if there is any deficiency.
IFRS 9-1: Component Depreciation
Component depreciation and how it should be used have been provided by the IFRS and GAAP. It occurs when an asset contains unlike parts that ought to be devalued with different handling. According to the International Financial Reporting Standards, if the parts of the asset offer unpredictable patterns of benefit, then the organisations are required to use component depreciation (Stickney & Weil, 2006).. The method is also adopted by the Generally Accepted Accounting Principles but rarely use it. The technique allows for a clearing image of the asset’s book worth. The way in which it was initially used and which was allowed for depreciating each asset component separately is no longer applied by the International Financial Reporting Standards.
IFRS 9-2: Revaluation of Plant Assets
The revaluation of plant assets is another major topic when it comes to comparing and contrasting the two accounting systems. Revaluation of plant assets is the process in which values are changed from book to fair usefulness. It is often required if there have been major developments in the economy and the market. According to the International Financial Reporting Standards, if an asset is re-estimate, then all funds in the same class are treated with one method. It ensures that companies always have a consistent way of revaluating assets.
IFRS 9-3: Recording Product Development Costs
Additionally, recording product development costs under the two accounting systems differ. Some their expenditures are noted as development expenses and others as development costs. According to the Financial Accounting Standards Board, the companies using the generally accepted accounting principles should register their research and development costs at the expense of the current period (Weygandt, 2009). On the other hand, they can put these costs into the capitals of the company. The companies using International Financial Reporting Standards are required to place these funds on the research costs. It is an option for a company to start reporting development costs as capital expenditures once technological viability has been reached.
IFRS 10-2: Contingent Liability in IFRS
According to essay writing service, International Financial Reporting Standards define a contingent liability as a loss that may potentially occur in the future. The contingencies will not be included in the financial statements but rather discovered within the notes. Some contingent liabilities are required to be presented in the balance sheets but are done only if the status of the contingent liability is known (Weygandt, 2009). For example, if a company X files a law suit against another company Y for $200,000. If the attorney for company Y thinks the law suit is of no importance, the company Y will disclose in the notes of the financial statements. Company Y proposes the payment 0f $50,000 to settle the law suit. The liability is both a probability and can be estimated so company Y records $50,000.
IFRS10-3: Recording Liabilities in GAAP versus IFRS
The Generally Accepted Accounting Principles and using International Financial Reporting Standards have some similarities and differences when it comes to the accounting for liabilities. According to The Generally Accepted Accounting Principles, liabilities are required to be reported in order of liquidity while the International Financial Reporting Standards need an inverse order of liquidity (Weygandt, 2009). Additionally, The Generally Accepted Accounting Principles allows both the effective interest rates and the straight line methods reporting benefit expenses while International Financial Reporting Standards, on the other hand, only allow use of effective interest rate method. The differences between the two systems are small and both work together to allow proper rules.
Generally Accepted Accounting Principles and International Financial Reporting Standards have small differences in their rules and policies. The two accounting systems are cooperated and actively allow accounting rules to be updated to support the continuous change in the business and technological environment. The systems may differ in some aspects that are very important to the global business and economy in maintaining high quality standards for accounting.
A lot of women overall spheres of whole life. The Women, Infants and Children Nutrients Software program.
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One of the major parts among the authorities on a country is to be sure that its citizens have enough money easy wishes. Different governments use different methods to ensure that their citizens get the most necessary needs to enable them survive and be healthy, however. These techniques change depending from the variety troubles that your chosen country is going through. A number of these issues are particularly poverty tier at the population and country amongst others. In north america, during the early 70s, the government opted to get a plan which will make sure that suitable product of diet regime to women, infants and children that happen to be 5 years existing and in the next paragraphs. This program unfortunately is ideal for the citizens who have been qualified for a remarkably less-income source in the country as an easy way of ensuring that that they are clear of nutritional potential risk. The program has been in point updated and features been bettering step by step so that you can have better service at the individuals.
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One of the major positions inside the government inside united states is to be certain that its locals are able major would need. However, different governments use different methods to ensure that their citizens get the most necessary needs to enable them survive and be healthy. These techniques differ dependent on with this style issues that your chosen country is going through. Some of these obstacles are in particular poverty levels in country and population to name a few. In the nation, at the begining of 70s, the federal government determined to make a program which would be certain appropriate nutritional supplement of eating routine to infants, women and children who are 5 years vintage and following next. This software though is made for the inhabitants who definitely are eligible for an immensely little-source of income in the nation as an approach of being sure that they are free from nutritional associated risk. The software program has been in internet site current and possesses been boosting slowly and gradually to have better specialists toward the people.
Girls in every spheres of existence. The Infants, Women and Children Eating routine Training program.
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