Choosing Between Generally Accepted Accounting Principles and International Financial Reporting Standards as Basis of Accounting Standards December 14‚ 2011 Research Paper Outline: Thesis Statement: Some experts do not prefer the adoption of IFRS principles because of its incompatibility with US Style Corporate Governance‚ its inefficiency compared to GAAP‚ and its inability to improve the present system. I. Introduction A. Current events about the topic (status quo) B. Definition
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GAAP (USA) To achieve basic objectives and implement fundamental qualities GAAP has four basic assumptions‚ four basic principles‚ and four basic constraints. Assumptions • Accounting Entity: assumes that the business is separate from its owners or other businesses. Revenue and expense should be kept separate from personal expenses. • Going Concern: assumes that the business will be in operation indefinitely. This validates the methods of asset capitalization‚ depreciation‚ and amortization
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MGT 6030 IFRS vs. US GAAP assignment In this assignment‚ I will talk about four ways in which financial reporting can differ between US GAAP and IFRS. The first issue is the way in which inventory is carried from period to period. Another is the revaluation of Property‚ Plant‚ and Equipment‚ which is allowed under IFRS. US GAAP does not allow such flexibility. The next difference I found interesting was that US GAAP has specific guidelines surrounding when to expense Advertising Costs. Given how
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2013/5/19 Group Five GAAP VS. IFRS US GAAP Codification Determination of Inventory Costs 330-10-30-9: Cost for inventory purposes may be determined under any one of several assumptions as to the flow of cost factors‚ such as first-in first-out (FIFO)‚ average‚ and last-in first-out (LIFO). The major objective in selecting a method should be to choose the one which‚ under the circumstances‚ most clearly reflects periodic income. May an entity elect LIFO method for inventory cost? IAS 2 Inventories
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Implementing IFRS Extract from: IFRS compared with US GAAP and French GAAP Assurance Services The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information‚ there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without
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GAAP – This is the General Accepted Accounting Principles‚ it is the basic principles of accounting - http://www.investopedia.com/terms/g/gaap.asp Basic Accounting Formula- means that all balances and ledgers must match at all times. If it does not then something was entered wrong in a ledger -http://www.accountingtools.com/basic-accounting-formula Transaction T account – A term used for double entry book keeping‚ a ledger with 2 separate lines separating debits and credits -http://www.investopedia
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What is the prudence concept in accounting? Under the prudence concept‚ you should not overestimate the amount of revenues that you record‚ nor underestimate the expenses. You should also be conservative in recording the amount of assets‚ and not underestimate liabilities. Another way of looking at prudence is to only record a revenue transaction or an asset when it is certain‚ and to record an expense transaction or liability when it is probable. Another aspect of the prudence concept is that you
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Executive Summary GAAP‚ generally accepted accounting principles‚ are the rules for preparing the financial statements. There are specialized professionals FASB‚ SEC‚ AAA‚ FEI‚ IMA‚ AIMR and others for developing GAAP. There are 13 principles for preparing Financial Statement. Business Entity Principle requires business to be separated from owner of the business. Going Concern principles requires the business to assume that the business will for long time. Revenue Recognition Principle considers
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working towards converging it own accounting standard‚ US GAAPs (United States Generally Accepted Accounting Principles) with IFRSs (International Financial Reporting Standards). This report is about the evaluation of the convergence project to form a global standardized financial statement. IFRS is a set of international accounting standards stated how particular types of transactions should be reported in financial statements. However‚ U.S GAAP is a common set of accounting principles‚ standards and
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IFRS vs U.S. GAAP Victoria Harris American Public University Acct 610 There are two sets of accounting standards that are used worldwide. One is the International Financial Reporting Standards (IFRS) and the U.S. Generally Accepted Accounting Principles (GAAP). There is a huge desire for there to one set of accounting standards worldwide with the increase of companies performing business in many different countries and global expansion. The International Financial Reporting Standards are issued
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