Preview

Us Accounting Standards vs. International Accounting Standards

Powerful Essays
Open Document
Open Document
1751 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Us Accounting Standards vs. International Accounting Standards
United States Accounting Standards vs International Accounting Standards

June 21, 2009

Introduction

This research project will inform the reader of the difference between the United States accounting standards and International accounting standards. The United States uses the Financial Accounting Standards Board (FASB) to issue financial reporting procedures. The International Financial Reporting Standards (IFRS) are issued by the International Accounting Standards Board (IASB). There are proposals for the United States to adopt the International standards. Financial reporting procedures are debated about the United States using the Generally Accepted Accounting Procedures (GAAP) or following the global procedures. This project will also examine, compare, and contrast this debate.

Discussion of Topic

In an article by Heidi Tribunella (2009), “U.S. GAAP is considered rules based. Rules-based accounting standards, on the other hand, give strict rules that must be adhered to in order to properly account for particular transactions. For example, lease accounting in the United States gives four criteria for determining if a lease is a capital lease. If a lease contains any of the following, then it is considered a capital lease and must be accounted for as such: 1 ) a bargain purchase option; 2) ownership transfers at the end of the lease; 3) minimum lease payments with a present value of at least 90% of the FMV of the asset; or 4) a lease length of at least 75% of the economic life of the asset. This is an example of very specific rules for accounting for leases” (Tribunella, 2009).

Tribunella (2009) goes on to explain International accounting standards, “International Financial Reporting Standards (IFRS) are issued by the International Accounting Standards Board (IASB), which was created in 200l. Previously, the International Accounting Standards Committee (IASC), founded in 1973, issued International


References: Bogoslaw, D. (2008, November 14). Global accounting standards? Not so fast. Businessweek Online, 17. Retrieved June 19, 2009, from http://search.ebscohost.com Marrero, J., & Brinker, T.M. (2007, January). Are accounting standards uniform? Recognizing cultural differences underlying global accounting standards. Journal of Financial Service Professionals, 16-18. Retrieved June 19, 2009 from http://search.ebscohost.com Meek, G.K., & Thomas, W.B. (2004). A review of markets-based international accounting research. Journal of International Accounting Research, 3(1), 21-41. Retrieved June 19, 2009, from http://search.ebscohost.com Pieniazek, A. (2007, April 9). U.S. gaap vs. international gaap vs. unified gaap. Accounting,College. Retrieved June 19, 2009, from http://www.adampieniazek.com/college/us-gaap-vsinternational-gaap-vs-unified-gaap/ Tribunella, H. (2009, March). Twenty questions on international financial reporting standards. The CPA Journal,32-37. Retrieved June 19, 2009 from http://search.ebscohost.com
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Powerful Essays

    E21-311: Additional Practice Exercises
    • 554 Words
    • 3 Pages

    E21-311: Additional Practice Exercises

    (five years) exceeds 75% of the remaining economic life of the asset (five years). Also, the present value of the minimum lease payments exceeds 90% of the fair value of the…

    • 554 Words
    • 3 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    ACC 290 IFRS v. GAAP
    • 1158 Words
    • 4 Pages

    ACC 290 IFRS v. GAAP

    Although the International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP) have a lot of similar guidelines and expectations, they also differ in many ways. The IFRS employs more of a “principles based” accounting standards whereas GAAP utilizes more of a “rules based” approach. Even though there are differences between terminology, revenue recognition, gains and/or losses, and statement presentation, both standards do follow the same conceptual guidelines. With the Sarbanes-Oxley Act (SOX) of 2002, the standards expected of foreign countries are significantly less than those that reside as publically owned companies in the U.S.…

    • 1158 Words
    • 4 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Where Does the Us Stand on the Adoption of Ifrs?
    • 1356 Words
    • 6 Pages

    Where Does the Us Stand on the Adoption of Ifrs?

    The globalization of markets over the past 50 years has led to the demand for increasingly comparable financial statements across countries. In response to this demand, the International Accounting Standards Board (IASB) was formed with the purpose of developing a set of high quality global accounting standards. Although a majority of developed markets have adopted the international standards, the United States has not. One reason for the delay in adoption is that many of the standards are very similar. However, there are also several key differences between the two. Presently, the United States Financial Accounting Standards Board (FASB) and the IASB have committed to work together to develop future standards jointly (FASB, 2011). Nonetheless, the key differences will have to be resolved and many believe the FASB will ultimately adopt international standards completely. This report seeks to discuss the US situation on the adoption of IFRS (International Financial Reporting Standards, as prescribed by IASB) and the possible effect of adoption on non-public businesses and the public?…

    • 1356 Words
    • 6 Pages
    Powerful Essays
    Read More
  • Best Essays

    U.S. GAAP vs IFRS
    • 3430 Words
    • 14 Pages

    U.S. GAAP vs IFRS

    The United States is coarsely going through a big dilemma. It is deciding whether to adopt International Financial Reporting Standards (IFRS), or to stay with the current U.S Generally Accepted Accounting Principles (GAAP). Since this is such a serious decision, now would be an opportune time to take a look at what the advantages and disadvantages would be of switching to the new way of financial reporting, and doing so, shows the beliefs of the costs being too high to adopt a new set of reporting standards. People who support switching from GAAP to IFRS argue that IFRS will offer a general reporting language and consistent financial reporting for companies with global operations to make financial reporting more meaningful across borders. And. Supporters also believe that one common reporting system will cut costs for companies and make it easier for investors to compare the financial statements of companies from different countries (Diamond and Herrmann, August 2008). From the problem that the switch to IFRS would be exceedingly costly, to the fact that IFRS leaves more room for interpretation and lacks bright line rules, I will discuss all the reasons why switching to IFRS soon would not be the right decision for the U.S.…

    • 3430 Words
    • 14 Pages
    Best Essays
    Read More
  • Better Essays

    Financial Statements Ifrs vs. Gaap
    • 1606 Words
    • 7 Pages

    Financial Statements Ifrs vs. Gaap

    For those in the business world, particularly in the accounting field, a major issue has surfaced in recent years relating to the differences between Generally Accepted Accounting Principles (GAAP) and the International Financial Reporting Standards (IFRS). Currently, the majority of countries in the world follow International Financial Reporting Standards guidelines; however, the United States still uses GAAP. This topic has been a main focus because there is a plan for convergence between the two frameworks in the near future. The United States accounting system will undergo drastic changes when this occurs, but in the long-run the idea is to simplify the accounting procedures around the world. “Through these projects, some covering major components of the financial statements, the boards intend to improve financial reporting information for investors while also aligning US and international accounting standards. These projects are a significant move toward achieving a common accounting framework, a necessary step in the globalization of business and investment” (PriceWaterhouseCoopers LLP, 2011). The main difference between GAAP and IFRS is that GAAP is considerably rule-based, whereas IFRS is more principal-based which means IFRS has room for interpretation. The specific differences are far too many to cover in a short presentation, however, an explanation of some major differences are mentioned below.…

    • 1606 Words
    • 7 Pages
    Better Essays
    Read More
  • Good Essays

    Differences Between Gaap and Ifrs
    • 1795 Words
    • 8 Pages

    Differences Between Gaap and Ifrs

    The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) are working together to eliminate a variety of difference between the United States generally accepted accounting procedures (U.S. GAAP or GAAP) and International Financial Reporting Standards (IFRS). This convergence project grew out of an agreement reached by the two boards in 2002 (Deloitte, 2004).…

    • 1795 Words
    • 8 Pages
    Good Essays
    Read More
  • Good Essays

    Fasb Convergence
    • 1091 Words
    • 5 Pages

    Fasb Convergence

    In 2001, the IASC was replaced by the IASB “(Schroeder, Clark, & Cathey, 2011, p. 82). The IASB wants to formulate and publish accounting standards and to promote them globally. The IASB currently consists of 15 individuals appointed by the trustees. The membership is based on the technical expertise. “On December 17, 2003, the IASB published 13 revised International Accounting Standards (IASs), reissued two others, and gave notice of the withdrawal of its standard on price level accounting. The revised and reissued standards mark the near completion of the IASB’s Improvements Project “(Schroeder, Clark, & Cathey, 2011, p.…

    • 1091 Words
    • 5 Pages
    Good Essays
    Read More
  • Better Essays

    Ifrs and Gaap Convergence Paper Essay Example
    • 1088 Words
    • 5 Pages

    Ifrs and Gaap Convergence Paper Essay Example

    Company’s need an accurate and reliable financial accounting systems not matter if globally or in the United States. Companies should report income, liability, equity, and assets. Many people (stockholders, investors, etc.) who have a stake in the company want to know this information before providing a service. In this paper, International Financial Reporting Standards (IFRS) and the Generally Accepted Accounting Principles (GAAP) will be compared for similarities and differences.…

    • 1088 Words
    • 5 Pages
    Better Essays
    Read More
  • Good Essays

    Financial Accounting Quiz
    • 786 Words
    • 4 Pages

    Financial Accounting Quiz

    2. (TCO A) The IASB: (Points: 5) governs accounting standards in the U.S. is working on a convergence project with the FASB. sets the accounting standards for only European countries. plays only a minor part in accounting rule making throughout the world.…

    • 786 Words
    • 4 Pages
    Good Essays
    Read More
  • Powerful Essays

    IASB And FASB Convergence Project
    • 1073 Words
    • 5 Pages

    IASB And FASB Convergence Project

    The International Accounting Standards Committee was formed in 1973 as the first international standards settlers and becoming an independent international standards settler in 2001. Since 1973 the Financial Accounting Standards Board (FASB) has been designated for the establishments of financial accounting that regulates the preparation of financial reports by non-governmental entities. Those standards are identified as authoritative by the Securities and Exchange Commission (SEC)…

    • 1073 Words
    • 5 Pages
    Powerful Essays
    Read More
  • Better Essays

    Fasb
    • 1094 Words
    • 5 Pages

    Fasb

    The IASB was established in 2001, after succeeding the International Accounting Standards Committee (IASC) which was established in 1973. The International Accounting Standards are created by the IASB and are called International Financial…

    • 1094 Words
    • 5 Pages
    Better Essays
    Read More
  • Good Essays

    Capitalizing Operating Leases
    • 865 Words
    • 4 Pages

    Capitalizing Operating Leases

    3. The lease term is equal to or greater than 75% of the estimated useful life of the leased asset.…

    • 865 Words
    • 4 Pages
    Good Essays
    Read More
  • Best Essays

    Ifrs and Gaap
    • 2481 Words
    • 10 Pages

    Ifrs and Gaap

    As the question stated, globalisation had cause creditor & investors difficult to compare the financial statements of companies in different countries because each of them had its own accounting standard. In addition, financial crisis and economic recession in recent year had pressure United State to agree work towards the convergence of US GAAP (General Accepted Accounting Principles) and IFRS (International Financial Reporting Standards). IFRS is a set of international accounting standards that have been widely adopted in more than 12000 companies and over 100 countries in the world. (Gornik-Tomaszewski & Showerman, 2010) At theoretically…

    • 2481 Words
    • 10 Pages
    Best Essays
    Read More
  • Powerful Essays

    accounting standards board
    • 1566 Words
    • 7 Pages

    accounting standards board

    Increased globalization in the business world has brought to fore some of the issues and challenges that multinational businesses face in financial recording and reporting of foreign based operations. With operations based in different countries that operate under different accounting principles and with varying currencies, there has been a need for the accounting principles and standards to be converged. This has in the past nine years seen the accounting policy making suggesting a complete overhaul in the way financial statements are reported and a convergence between the US's generally accepted accounting principles (US GAAP) and the International Financial Reporting Standards (IFRS). This has been through various meetings between the International Accounting Standards Board (IASB) and US Financial Accounting Standards Board (FASB), two boards which determine these accounting standards. This paper therefore evaluates the history of the two boards and their relationship and looks at IASB equivalents to FASB original pronouncements. It also describes how a Master of Science in Accounting would prepare a student for an accounting profession.…

    • 1566 Words
    • 7 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Uniform Accounting Standards
    • 1544 Words
    • 7 Pages

    Uniform Accounting Standards

    Susanne Fritz and Christina Lämmle. (2003). The International Harmonisation Process of Accounting Standards . . 1 (1), 12-19.…

    • 1544 Words
    • 7 Pages
    Powerful Essays
    Read More

Related Topics