Investment Under Ifrs and Gaap
In order for us to understand this research paper, we would first need to understand the IFRS and U.S. GAAP. We will first describe U.S. GAAP and IFRS by investments through property, associates equity method, and investments in joint ventures. Our research paper will compose of the nature of accounting issues, historical background of accounting rules in U.S. and IFRS, recognition and measurement rules, presentation and disclosure rules, and development along with the harmonization efforts of FASB and IASB.
Before we start all of these, we would like to give a brief description how U.S. GAAP differ from IFRS and why we need both of them. The International Financial Reporting Standards are destined to be the language of the accounting world. This means that, if the United States wants to understand the financial reports, and do international businesses, the IFRS needs to be present in our country. Almost one hundred countries already require and is converging to the national accounting standards with IFRS.
People might ask what is the difference between U.S. GAAP and IFRS? Well, mostly IFRS is more principle based set of standards rather than rule based approach of the U.S. GAAP. While IFRS currently fills approximately two thousand accounting regulations, U.S. GAAP comprises over two thousand separate pronouncements which are hundreds of pages long each. The difference in the number of pages simply defines their difference in being rules based and principle based. The two systems differ conceptually as well rather than just philosophical. Conceptually meaning on a number of points, and can significantly report different results. They also differ in presentation, pre-operating and pre-opening costs, borrowing costs, and fair value, inventories, revenue recognition, and extraordinary items. It is both important to know IFRS, and U.S. GAAP because we need to be adaptive throughout the whole world, even though not all of the countries can. Understanding
Before we start all of these, we would like to give a brief description how U.S. GAAP differ from IFRS and why we need both of them. The International Financial Reporting Standards are destined to be the language of the accounting world. This means that, if the United States wants to understand the financial reports, and do international businesses, the IFRS needs to be present in our country. Almost one hundred countries already require and is converging to the national accounting standards with IFRS.
People might ask what is the difference between U.S. GAAP and IFRS? Well, mostly IFRS is more principle based set of standards rather than rule based approach of the U.S. GAAP. While IFRS currently fills approximately two thousand accounting regulations, U.S. GAAP comprises over two thousand separate pronouncements which are hundreds of pages long each. The difference in the number of pages simply defines their difference in being rules based and principle based. The two systems differ conceptually as well rather than just philosophical. Conceptually meaning on a number of points, and can significantly report different results. They also differ in presentation, pre-operating and pre-opening costs, borrowing costs, and fair value, inventories, revenue recognition, and extraordinary items. It is both important to know IFRS, and U.S. GAAP because we need to be adaptive throughout the whole world, even though not all of the countries can. Understanding