INTRODUCTION
The GAAP (US Generally Accepted Accounting Principles) is the accounting standard used in the US, while IFRS (International Financial Reporting Standards) is the accounting standard used in over 110 countries around the world. The GAAP is considered a more “rules based” system of accounting, while IFRS is more “principles based.” Soon, the U.S. Securities and Exchange Commission is looking to switch to IFRS by 2015. The Comparison highlights some significant U.S. GAAP and IFRS requirements, which we believe are most commonly encountered in practice. This Comparison may be helpful to individuals that are new to IFRS who are trying to gain an appreciation of the more significant requirements of IFRS and how these requirements differ from those in the United States.
Question 1
This are an overview of the differences between the accounting frameworks used by GAAP and IFRS.
IFRS USGAAP
Stands for International Financial Reporting Standards. United states’ Generally Accepted Accounting Principles.
Introduction International Financial Reporting Standards (IFRS) are a set of accounting standard developed by the International Accounting Standards Board (IASB) that is becoming high quality, understan- dable, enforceable and globally accepted international financial reporting standards (IFRSs) based up on clearly articulated accounting principles. Generally Accepted Accounting Principles (GAAP) refer to the standard framework of guidelines for financial accounting used in any given jurisdiction; generally known as accounting standards. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing account- ing transactions, and in the preparat- ion of financial statement.
U...
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...ties are carried at cost less accumulated depreciation and any accumulated impairment losses.
[IFRS for SMEs 16.8]
Similar to IFRS for SMEs; however, full
IFRS refers to IAS 16, ‘Property plant and equipment’.
[IAS 40.56]
Transfers
Transfer to or from investment properties applies when the property meets or ceases to meet the definition of an investment property.
[IFRS for SMEs 16.9]
IFRS includes further guidance on the situations when a property can be transferred to or from the investment property category.
[IAS 40.57]
Conclusion
In conclusion, a precise and more appropriate definition that reflects the size, the nature and needs of SMEs is essential and advantageous not only for a particular SME itself, but also for policy makers and supporting agencies in planning and nurturing the proper growth and development of the SMEs sector in Malaysia as a whole.
Switching to IFRS will help not just companies but also investors and public globally to compare financial statements. If every country has different financial standards, if would be problematic to compare how each company stands because they are not the same.
A transfer is the conveyance of a financial asset that is not cash by a person that is not the issuer of that asset. Transfers allow receivables to be sold, put into a securitization trust, and r...
The goal of the Codification is to simplify the organization of thousands of authoritative U.S. accounting pronouncements issued by multiple standard-setters. To achieve this goal, the FASB initiated a project to integrate and topically organize all relevant accounting pronouncements issued by the U.S. standard-setters including those of the FASB, the American Institute of Certified Public Accountants (AICPA), and the Emerging Issues Task Force (EITF)
Conclusion: It is evident that if these financial practices were to be followed, David Johnston, the CRA, the business, and its stakeholders will be satisfied. A business must obey IFRS standards, as it provides a corporation with accurate measures of finance and
To help accounting professionals easily navigate through 50-plus years of unorganized US generally accepted accounting principles (GAAP) and standards the Trustees of the Financial Accounting Foundation approved the Financial Accounting Standards Board (FASB) Accounting Standards Codification (Codification.) By codifying authoritative US GAAP, FASB will provide users with real-time and accurate information in one location. Concurrently, FASB developed the FASB Codification Research System; a web-based system allowing registered users to electronically research accounting issues. Since 2009, the codification became the single source of nongovernmental authoritative GAAP.
In the world of international finance there are two major accounting systems; GAAP, which stands for Generally Accepted Accounting Principles, and IFRS, which stands for International Financial Reporting Standards. The United States prefers GAAP while the European market, as well as many other countries, prefers IFRS. By 2015 the Securities Exchange Commission is anticipating a total transfer to IFRS in the United States. Though the differences between GAAP and IFRS are few, they could affect accuracy of financial reporting throughout the world. It is important to understand the differences and similarities between both GAAP and IFRS if one is to globalize ones market (Logue).
Real estate assets as buildings, land or machinery and equipment are suitable for sale/leaseback operations.
This paper is written to provide a reasonably comprehensive overview of Section 1031 of the IRC as it pertains to real estate transactions, and to offer some thoughts on the wealth-creation advantages that 1031 Exchanges offer.
This essay will discuss the influence NZ Framework brings to financial reporting standards that included NZ GAAP based on the debate between principles-based and rule-based. In particular, it will portray: (1) the nature and orientation of financial reporting framework and GAAP; (2) the main improvement of NZ Framework and the applications framework guided in NZ GAAP.
Commercial real estate can be purchased by anyone. Most often it is purchased by businesses or business owners. However it is not uncommon for people to invest in commercial real estate through “REITs” or real estate investment trusts. A real estate investment trust is a real estate company that offers common shares to the public. Thus making it similar to any ot...
The main differences between the current U.S. GAAP reporting and IFRS reporting include: revenue recognition, inventory valuation, reporting assets, accrued expenses and the preparation of the statement of cash flows. The IFRS has two primary revenue standards and four revenue focused interpretations for revenue recognition which include the sale of goods, the sale of services, the use of assets, and construction contracts (Kaiser). According to the U.S GAAP, revenue can only be realized or earned, and revenues are only recognized if and only if an exchange transaction takes place. Under the U.S GAAP, a financial entity will record one hundred percent of a sale’s transaction as revenue upon selling a given good...
I have applied the IFRS to audit half-year income statement and statement of finical position from domestic sub-company or oversea branches. This allows me to understand the difficultly of dealing with accounting report form different nations. For example, we have to negotiate each report from the U.S. with their reporter by phone. It would take incredibly long time to explain the difference in order to adjust the figures in the reports. During the stuff training, we have been taught that to be professional at everywhere and anytime. Moreover, I realise that the most important feature to be a professional accountancy is responsibility. This is because that a unit of misallocation will cost other team number a huge amount of work to correct it. The experience of taking notes of weekly conferences between senior managers and PWC partner has indicates that how does change in financial policy influence the accounting treatment. For instant, since vice-perminster Mr Le Ke Qiang who visited China Construction Bank at earlier May. He point out that the Rate of Non-Performing Loans could not exceed 7% in the “BIG Four” Chinese bank. This has led Chinese bank to relax its accounting standard of credit rating. It allows me to understand the relationship between government and financial
Real estate is one of the most dynamic and sophisticated industry we have today. This is can be said to be the result of the many different players that one encounters and the rapidly changing way of doing things in this industry. It is therefore not surprising that after an investor invests in rental property, the task of managing and running it may soon become an overwhelming task. This is condition is aggravated if such an investor has no knowledge in property management or simply has other issues to take care of.
GAAP is exceptionally useful because it attempts to regulate and normalize accounting definitions, assumptions, and methods. Because of generally accepted accounting principles one is able to presuppose that there is uniformity from year to year in the methods that are used to prepare a company's financial statements. And even though variations might exist, one can make realistically confident conclusions when comparing one company to another, or when comparing one company's financial statistics to the statistics for the industry as a whole. Over the years the generally accepted accounting principles have become more multifaceted because financial transactions have become more intricate (Accounting Principles, 2011).
This case study is about the achievement of SME Corporation which aimed to improve and build people’s welfare and restructure ethnic economic imbalance. Small and Medium Industries Development Corporation (SMIDEC) is a specialized agency that to stimulate the development of Small and Medium Enterprises (SMEs). The SMIDEC purpose in stimulate the SMEs is to develop Malaysian SMEs that capable and competitive to compete in global market. SMIDEC also provides various facilities to help SMEs which is infrastructure, financial assistance, advisory services, and market access and support programs.