US GAAP vs. IFRS

Anonymous
timer Asked: May 6th, 2018
account_balance_wallet $10

Question description

Write a 1,050- to 1,400-word paper that addresses the following scenario and questions:

Your aunt recently received the annual report for a company in which she has invested. The report notes that the statements have been prepared in accordance with "generally accepted accounting principles." She has also heard that certain terms have special meanings in accounting relative to everyday use. She would like you to explain the meaning of terms she has come across related to accounting.

  • Go to the FASB website and access the FASB Concepts Statements and use the IASB website to respond to the following items. (Provide paragraph citations.) When you have accessed the documents, you can use the search tool in your Internet browser.
    • Explain how "materiality" is defined by both FASB and IASB.
    • The concepts statements provide several examples in which specific quantitative materiality guidelines are provided to firms. Identity at least two of these examples. Do you think the materiality guidelines should be quantified? Why or why not?
    • The concepts statements discuss the concept of "articulation" between financial statement elements. Briefly summarize the meaning of this term and how it relates to an entity's financial statements.

Tutor Answer

Clue_Master
School: University of Virginia

Hi there Lacie,Below please find the completed task. Let me know if it is satisfactory.Regards!

1
RUNNIG HEAD: US GAAP vs IFRS

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2
RUNNIG HEAD: US GAAP vs IFRS

US GAAP vs. IFRS
As per the content obtained from FASB website, materiality is the omission or improper
statement of accounting information that as per the current situation that a person is in may lead
to one making a different decision due to the omission of such information. This is what makes
up materiality. It is a prevalent concept that relates to the qualitative characteristics particularly
relevance and reliability. Although they can be differentiated, materiality and relevance are both
defined in terms of what influences a decision maker. There are instances where a decision can
be made not to disclose certain information to investors probably because they do not require
such information. Or because the information involved is so minute that it will not influence their
decision making process. When doing a materiality judgment, magnitude has to be considered
and the nature of the item as well as circumstances under which the judgement has to be made.
The board issues a qualitative materiality criteria, by looking at the history of issues as well as
future projections, accordingly. This is because no general criteria can be formulated to take into
account all such matters requiring a materiality judgment.
According to the IASB website, the materiality project came up as part of IASB...

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Review

Anonymous
Awesome! Exactly what I wanted.

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