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Compare and Contrast IFRS vs US GAAP
Finance & Accounting
Pages 4 (1004 words)
IFRS Vs U.S GAAP (Name) (Course) (Tutor’s Name) (Date) IFRS Vs U.S GAAP Introduction U.S GAAP (Generally Accepted Accounting Principles) is practiced only in United States while IFRS (International Financial Reporting Standards) are adopted by the International Accounting Standards Board (IASB).
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. ...
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