Gaap & Ifrs

Topics: International Financial Reporting Standards, Financial statements, Balance sheet Pages: 2 (446 words) Published: January 14, 2013
Whatever GAAP or IFRS, there are the rules accounts has to be followed. GAAP is an accepted set of rules, conventions, the standard framework of guidelines and procedures for reporting financial information, as defined by the Financial Accounting Standards Board. “It includes the standards, conventions, and rules accountants follow in recording and summarizing transactions, and in the preparation of financial statements” (American Institute of Certified Public Accountants, website). GAAP include Business Entity Concept, The Continuing Concern Concept, The Cost Principle, The Principle of Conservatism and so on. On the other sides, IFRS, which is International Financial Reporting Standard, are a set of accounting standards developed by an independent, not-for-profit organization called the IASB, which is International Accounting Standards Board. IFRS’s goal is provide a global framework for how companies can prepare and disclose their Financial Statement. The specific differences between GAAP and IFRS have been shrink that the convergence projects between IASB and the FASB. “Yet significant differences do remain, most any one of which can result in significantly different reported results, depending on a company's industry and individual facts and circumstances” (American Institute of Certified Public Accountants, website). Under this two framework, GAAP and IFRS have lots of similar and differences. For doing financial statement presentation, both GAAP and IFRS have a set of financial statement include, balance sheets, income statement, cash flows, etc. Also require that financial statements be prepared on the basis account. If deferred the tax assets and liabilities in balance sheet using GAAP. All the accounts will be required on the nature of the related assets and liability as current or non-current. If using IFRS, all amounts will in the balance sheet as non-current. Layout of Income Statement and Balance Sheet use GAAP, there are no general...
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