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Finance & Accounting
Pages 3 (753 words)
GAAP VS IFRS Name: Professor’s Name: Course Title: Date: GAAP VS IFRS Question 1 It is essential for a company to convert from GAAP to IFRS. A company can submit its financial statements on an identical basis as its foreign opponents by adopting IFRS, making comparison less complicated.
The United States corporations will benefits by converting from GAAP to IFRS. One, IFRS allows extra flexibility than United States GAAP, and because stock option and bonus schemes normally offer managers incentives to enhance earnings, this flexibility will probably be utilized to enhance the income of U.S corporations more frequently than it will be employed to lessen earnings. Two, converting to IFRS from GAAP will give the corporations in America more responsibility in the area of asset valuation as a complete discretion that is also likely to enhance the earnings of U.S corporations. Finally, in the field of research and development costs and the associated field of homegrown intangible asset valuation, IFRS is more liberal than GAAP. IFRS permits only development costs to be integrated in the assets of the corporations, thus, not expensed against earnings (Ciesielski, 2008). Question 2 One, Acquired intangible assets under GAAP are identified at fair value. In contrast, under IFRS, it is solely identified if the asset has measured dependability and will have an imminent economic gain. Here, IFRS will be the most beneficial method to financial statement users. ...
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