ACCT 430 CTU Unit 2 International Accounting Standard Variance Among IFRS and GAAP Discussion

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nfbar0511

Business Finance

Colorado Technical University

Description

International Accounting Standard 18 (IAS 18) provides the general standards for revenue recognition and measurement in the IFRS.

  • Provide 3 examples of the differences between the 2 sets of standards. 

Review the IAS 7 statement of cash flows, and complete the following: 

  • Discuss the differences in classifications of cash flows between IFRS and U.S. GAAP.  
  • What impacts will these have on U.S. companies?  
  • Cover the differences with the classifications of contingent liabilities between U.S. GAAP and IFRS. Be sure to cover the topics of possible, probable, and bright-line tests.  
  • When looking at cash and cash equivalents definitions between IFRS and U.S. GAAP, discuss the differences for the following:  
    • Best estimates  
    • Risks  
    • Uncertainties 

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Explanation & Answer

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Distinction among IFRS and U.S GAAP:
Consolidation
Income Statement
EPS (Earning per share)
Differences in classifications of cash flows between IFRS and U.S. GAAP
IFRS provide organizations greater flexibility
Under IFRS premium got might be delegated
Under GAAP, interest got must be named a working action
Under IFRS interest might be a financing action
Under GAAP interest must be an operating activity
Under IFRS Annual assessment cost is commonly delegated an operating movement
Under GAAP, Annual duty cost must be named an operating action
Effect on U.S Organizations
Differences with the classifications of contingent liabilities:
Under IFRS, Unforeseen liabilities are available commitments with vulnerabilities
IFRS Principles, 'misfortune possibilities' are dubious commitments
Under IFRS, Unexpected liabilities are not perceived aside
Unlike IFRS Principles, unforeseen liabilities are perceived in a business blend
Three GAAP listed classes of contingent obligations: possible, probable, and bright-line
tests
5. Risks and Uncertainties
6. Estimates and uncertainties


Running head: ASSIGNMENT

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Assignment
By
[Name of the Student]

Course
Professor
[Name of the institution]
September 28, 2020

ASSIGNMENT

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A foremost variance among IFRS and GAAP is that IFRS is principle-focused, whereas
GAAP is rule-focused. Another variance among both of these accounting standard boards is the
procedure utilized to measure a bookkeeping action. Under GAAP, the investigation is more
concentrated on the historical study, whereas, under IFRS, the truth arrangement analysis is more
systematic (Lumen).
Some distinction among IFRS and U.S GAAP are as per the following.
Consolidation — IFRS supports a control structure, whereas GAAP chooses a possibility
and recompenses structure. Some objects consolidated in accord with the rule could have t...


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