accounting final

Topics: Depreciation, Asset, Balance sheet Pages: 4 (847 words) Published: April 26, 2015
IFRS 8-1:
“Basic accounting and reporting issues related to recognition and measurement of receivables, allowance accounts, recording discounts, the allowance method to account for bad debt and factoring are basically the same between IFRS and GAAP. However, the FASB (Financial Accounting Standards Board) and IASB (International Accounting Standards Board) are taking steps by working to implement fair value measurement, the amount they currently could be sold for, for financial instruments. “The FASB and IASB are facing opposition from various factors thus have adopted a piecemeal approach. Step one is to disclose the fair value information in the notes, and second step is the fair market option which permits companies to record some type of financial instrument at fair value in financial statements”(Kimmel, P. D., 2013). “While both the FASB and IASB believe that financial statements would be more transparent and understandable if companies recorded and reported all financial instruments at fair value. Critics say that this FASB and IASB split model, some financial instruments are reported at fair value, and some reported assets can be amortized cost, can result in making a company look like two companies. The illusion of two companies is created due to the identical securities accounting of those securities in different ways”(Kimmel, P. D., 2013). IFRS 9-1:

“Under IFRS depreciation methods are the same as those of GAAP. - Straight line, declining balance and units of production. The major difference is that IFRS has an added depreciation method. "Component depreciation specifies that any significant parts of a depreciable asset that have different estimated useful lives should be separately depreciated. Component depreciation is allowed under GAAP but is seldom used" (Kimmel, P.D., Weygandt, J.J., & Kieso, D.E, 2013). This basically means that if an asset has other components they need to be accounted for separately. The salvage value under IFRS is known...
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