StudentShare solutions
Triangle menu

Income Statements of International Financial Reporting Standards - Term Paper Example

Extract of sample
Income Statements of International Financial Reporting Standards

In addition, the US GAAP treatment allows either single step or multiple steps format for income statement captions. According to Epstein (2011), under US GAAP, expenses such as cost of sales and administrative expenses have to be classed by function whereas in IFRS, expenses can be classed by function or nature. According to US GAAP treatment, classification of extraordinary items is permitted under certain circumstances and it can also be segregated within operating income. In contrast, IFRS bans classification of unusual items although it permits segregation of such items. Epstein (2011) states that the US GAAP considers estimated operating results of a discontinuing operation while measuring the expected gain or loss on disposal; on the other hand, IFRS reports actual operating results of a discontinuing operation as incurred. US GAAP provides a broader definition for discontinued operations while IFRS sets a narrow definition. Under US GAAP, restructuring costs are recognized only when it becomes necessary but IFRS recognizes restructuring costs when it is announced. Finally, additional comprehensive income items may be presented in changes in stockholders’ equity statement under US GAAP; but, this practice is not permitted under IFRS treatment. Differences in Balance Sheets As in the case of income statement, the IFRS balance sheet is also dissimilar to a typical US GAAP balance sheet. In the opinion of Epstein (2011), limited guidance on offsetting of assets and liabilities is a characteristic feature of US GAAP; however, IFRS insists specific guidance on offsetting of assets and liabilities. In case of IFRS, financial position’s classified statement is essential unless liquidity ordering is more meaningful. In contrast, such a statement is not required under US GAAP. Differences also exist in the definition of current/noncurrent between IFRS and US GAAP. The US GAAP treatment does not allow offsetting of assets and liabilities with various counterparties but it allows offsetting with same counterparties if and only the intention is to settle “net” (Epstein, 2011). On the other hand, IFRS permits some offsetting of assets and liabilities with various counter parties if legal provision allows it. Exclusion of long-term debt from current liabilities is a specific feature of IFRS. The US GAAP treatment refinances the exclusion of long term debt. The IFRS treatment states the minority interests as a component of equity while US GAAP guidelines restrict the presentation of minority interests as equity. As per the structure of US GAAP balance sheet format, entries are presented as total assets balancing to total liabilities in addition with shareholders’ equity. In contrast, IFRS entries include current and non-current assets and current and non-current liabilities. While US GAAP presents items on the basis of decreasing order of liquidity, the IFRS presents the items in the increasing order. Advantages of IFRS to End Users Generally company management, shareholders, investors, and third parties such as banks and other financial institutions are the end users of financial statements. They get ranges of advantages if companies use IFRS accounting in financial statements. To the extent that financial statement information is not available form external sources, investors and other external users give emphasis on company financial statements. ...Show more
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Income Statements of International Financial Reporting Standards Term Paper”, n.d.)
Retrieved from https://studentshare.net/finance-accounting/40418-compare-and-contrast-ifrs-vs-us-gaap
(Income Statements of International Financial Reporting Standards Term Paper)
https://studentshare.net/finance-accounting/40418-compare-and-contrast-ifrs-vs-us-gaap.
“Income Statements of International Financial Reporting Standards Term Paper”, n.d. https://studentshare.net/finance-accounting/40418-compare-and-contrast-ifrs-vs-us-gaap.
  • Cited: 0 times

Summary

The paper “Income Statements of International Financial Reporting Standards” will analyze notable differences between IFRS income statement and a typical income statement prepared using U.S GAAP. Income statement captions are not required in the case of GAAP…
Income Statements of International Financial Reporting Standards
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the term paper on your topic
"Income Statements of International Financial Reporting Standards"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

International Financial Reporting Standards
Introduction International Financial Reporting Standards were implemented after the overall complexity of business organizations as well as the nature of accounting relatively changed. International Financial Reporting Standards (IFRS), therefore, have been considered as an effort by the world accounting governance bodies to ensure that uniform reporting standards are adapted across the whole world.
8 pages (2000 words) Dissertation
Financial Reporting - International Accounting Standards
The essay discusses the challenges faced by International Accounting Standards Board in accomplishing its mission of introducing international financial reporting standards for general purpose financial statements. It further discusses about the key characteristics of International Accounting Standards Board’s framework.
12 pages (3000 words) Essay
International Financial Reporting Standards
These adjustments have necessitated changes in several business aspects, including adjustments in financial reporting techniques by organizations. There are various corporations, which are involved in international transactions. The current international market is demanding conformity in financial reporting principles.
3 pages (750 words) Research Paper
International Financial Reporting Standards
In the international community the fastest growing accounting framework that is being used in the business industry of different countries is the international financial reporting standards (IFRS). The international financial reporting standards were created by the International Accounting Standards Board (IASB).
4 pages (1000 words) Assignment
International Standards for Financial Reporting
Strategic management guidelines have been developed with regard to analyzing and writing up case studies. The goal of a case study analysis is to determine the value of a company as expressed through its choices of strategy and structure. A case analysis of a company it is critical that it be systematic (Hill and Jones C1).
8 pages (2000 words) Case Study
International Financial Reporting Standards
This Essay provides an adequate knowledge of International Accounting Standard (IAS) and General Accepted Accounting Principle (GAAP) and their comparison. Mainly we only emphasize on the 5 IAS and compare their similarities and differences with the GAAP.
8 pages (2000 words) Essay
International Financial Reporting Standards Essay
Uniformity in adopting financial standards also helps in understanding the nature of business and standings in a better way. Though the international financing standards are being changed from time to time in order to make the accounting practices contemporary, yet the full version of IFRS came into being in the year 2005 when more than 8000 companies in the EU region decided to adopt these standards (Banerjee, 2008).
4 pages (1000 words) Essay
International Financial Reporting Standards
The analysis to be presented in the report will be examined for its implications for Saudi based companies that are required to
8 pages (2000 words) Research Paper
IFRS ( international financial reporting standards)
International financial reporting standards (IFRS) refer to a set of international standards in accounting that determine how the reporting of certain transactions in the financial statements should be done (Godfrey & Chalmers 2007, p. 233). IFRS tends to be based on
4 pages (1000 words) Essay
International Financial Reporting Standards
This is unlike this is unlike the other existing financial reporting frameworks which, on the contrary, set rules, and regulations with
2 pages (500 words) Essay
Comments (0)
Click to create a comment
Let us find you another Term Paper on topic Income Statements of International Financial Reporting Standards for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us