Mohamed Samir Rashed
CMA , IFRSDIP
US GAAP
VS
IFRS
US GAAP (Generally Accepted
Accounting Principles) and IFRS
(International Financial Reporting
Standards) are both frameworks for
financial reporting. While they share
some similarities, there are also key
differences between the two
standards.
Here are some of the main differences
between US GAAP and IFRS:
THE CONTENT
1-Conceptual Framework.
2-Inventory Valuation.
3-Research and Development Costs.
4-Intangible Assets.
5-Financial Statement Presentation.
6-Lease Accounting.
7-Impairment Testing.
8-Revenue Recognition.
9-Financial Statement Format.
10-Consolidation of Financial Statements
1-Conceptual Framework
IFRS is based on a principles-based
conceptual framework, while US
GAAP is based on a rules-based
conceptual framework.
2-Inventory Valuation
Under US GAAP, companies use Last
In First Out (LIFO) method to value
inventory, while IFRS prohibits the
use of LIFO.
3-Research and Development
Costs
Under US GAAP, research and
development costs can be
capitalized and amortized over a
period of time, while IFRS requires
that all research and development
costs be expensed when incurred.
4-Intangible Assets
Under US GAAP, intangible assets
can be revalued at fair value, while
IFRS prohibits revaluation of
intangible assets.
5-Financial Statement Presentation
US GAAP requires a classified
balance sheet, while IFRS does not
require a classified balance sheet.
6-Lease Accounting
Under US GAAP, leases are classified
as either operating or capital leases,
while under IFRS, leases are classified
as either finance leases or operating
leases.
7-Impairment Testing
US GAAP uses a two-step
impairment testing approach,
while IFRS uses a one-step
impairment testing approach.
8-Revenue Recognition
US GAAP has specific revenue
recognition rules for various
industries, while IFRS has a more
general revenue recognition
framework.
9-Financial Statement
Format
US GAAP has specific requirements
for the format and content of
financial statements, while IFRS
allows more flexibility in financial
statement presentation.
10-Consolidation of
Financial Statements
US GAAP has a more detailed set of
rules for the consolidation of
financial statements, while IFRS
has a more principles-based
approach.
It's worth noting that there has been a
push towards convergence of US GAAP
and IFRS in recent years, with the aim
of creating a single, globally accepted
set of accounting standards.
However, as of now, there are still
significant differences between the
two frameworks.
Mohamed Samir Rashed
CMA , IFRSDIP
For contact
mohammedsamir947@gmail.com
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Mohamed Samir CMA , DIPIFR
@MohamedSamirRa
Mohamed Samir Rashed
