convergence between GAAP and IFRS

convergence between GAAP and IFRS Essay example
College
Essay
Finance & Accounting
Pages 4 (1004 words)
Download 0
Name: Instructor’s Name: Course: Date: Joint ventures of IASB and FASB The two boards are constantly working especially on those projects which are entirely treated differently under both accounting frameworks. One of the major progresses that have been substantiated is the acceptance of FASB to include the leases with 1 year or more to be included in the balance sheet (Henson, 2012)…

Introduction

Furthermore, consideration in respect of financial statement presentation and business combination is required significant convergence (Kaiser et al., 2012). Challenges and Benefits of Convergence As far as the convergence is concerned, it can be observed that US public listed companies will be benefitted more if they adopt IFRS as an obligation from SEC. There are various difficulties as well as benefits of adoption of IFRS as a means of convergence. The major difficulty that may arise due to such convergence is the transition of financial statements from US GAAP to IFRS. The transition will cause a significant change in both the financial performance and financial position of the entities. There is likelihood that the entities may not be able to present better financial results due to such convergence which, otherwise they would have presented in case of applying US GAAP. However, the advantages of convergence still supersede the challenge of transition of IFRS by US listed entities. Some of these advantages are discussed as under: The first and foremost advantage of convergence to a single accounting framework is the comparability. The benefit of comparability can be illustrated through an example. ...
Download paper
Not exactly what you need?

Related papers

IFRS AND GAP CONVERGENCE
GAAP stands for General accepted accounting principles and are the set of standards developed by US, keeping their needs in mind. On the other hand, IFRS stands for international financial reporting standards are standards developed by UK. In the past financial statements were relevant to these respective countries only but globalization has called for the need of one set of standards. Convergence…
Inherent Difference Between US GAAP and IFRS on Revenue Recognition
In case either requirement fails, the seller must defer revenue recognition, and accounting guidance provides special procedures for single arrangements that contains multiple deliverables and for long-term contracts (Gill, 2007). US GAAP on Revenue Recognition A firm’s gross accounts receivable reflects the amounts customers have promised to pay, and balance sheet displays these receivables net…
The International Convergence Project
Globalization has undoubtedly contributed to the economic growth in developed as well a developing countries through the principle of comparative advantage and increased specialization. With the benefits of globalization, the policy makers have also recognized the need for uniform disclosures by firms engaged in multinational businesses. As accounting is a universal language for business, it…
Convergence from GAAP to IFRS
The paper will further discuss the benefits, which will accrue to United States firms, investors, and the economy as a whole, as a result of converging from United States Generally Accepted Accounting Principles to International Financial Reporting Standards. Convergence from Generally Accepted Accounting Principles to International Financial Reporting Standards Currently, International Financial…
IFRS
The reason for opting for gradual convergence instead of adoption is that the local accounting body may want to become involved in the standard setting process. If IFRS is adopted fully then we will just have to accept what a few people have decided for us. I think we should be involved in decisions that affect us, and other countries have taken a similar approach. In fact, Ramanna and Sletten…
IFRS and GAAP Convergence
When the financial statements are available in annual reports, it is the responsibility of the managers to evaluate and discuss results of company performance. External parties use these financial statements to analyze the company’s financial performance. Therefore, external users of financial statements are requires to be familiar with the tools and techniques which are used in financial…
Convergence between GAAP and IFRS
The US Generally Accepted Accounting Principles is the major accounting standard used in the United States (Walton 45-46). The International Financial Reporting Standard on the other hand is the accounting standard practiced in over 110 countries in the world. U.s. GAAP is mostly considered as a more rule based accounting system, while IFRS is mostly based on principles. It is therefore obvious…