Essays on US GAAP And IFRS

IFRS and US GAAP: Similarities and Differences (Financial Assets)

IFRS and US GAAP: Similarities and Differences (Financial Assets)

Introduction

The US GAAP (Generally Accepted Accounting Principles) is a set of accounting standards followed in the United States. With the emergence of internationalization, cross border flow of capital, people, cultures, and ideas became very common and the situation in turn contributed to the rapid growth of multinational corporations. Since different countries followed different accounting standards earlier, it was very difficult for MNCs to record their financial/accounting transactions in a unified manner. It persuaded regulators and businesses worldwide to think of a globally recognizable accounting standard leading to the development of ...

The ongoing internationalization process persuaded regulators and businesses worldwide to think of a common global accounting language for business affairs. This move led to the development of IFRS. International Financial Reporting Standards (IFRS), sometimes referred to as International Accounting Standards, is a globally recognized accounting framework for businesses worldwide. The major purpose of this accounting standard is to make company accounts understandable and comparable across international boundaries. Currently, over 110 countries are following the IFRS accounting system in order to address complexities relating to international business affairs. However, the United States has not adopted IFRS yet, and the country ...

Abstract

This paper presents the ideal purpose of adopting a unitary global set of accounting standards to be applied across the globe. It presents the major characteristics of both the dominant accounting standards used worldwide, the IFRS and the US GAAP. It examines whether the IFRS or US GAAP works best for the present and the future needs of a global finance system. The various differences of these two accounting standards were shown. The major applications of the IFRS as the leading accounting standards and principles were also highlighted in the paper. It also provided various guidelines in this seemingly ...

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Introduction. Interpreting financial statements (FS) requires a thorough understanding of basic principles of accounting and reporting. This paper discusses such concepts as accounting equation and basic formats of FS, role of international financial reporting standards (IFRS), US Generally Accepted Accounting Principles (US GAAP) and The U.S.Securities and Exchange Comission (SEC) in the reporting process. Principal financial concepts. US GAAP are a set of accounting standards used by US companies for financial reporting. They are introduced by the Financial Accounting Standards Board (FASB) in compliance with SEC regulations and FASB mission of setting and improving principles of accounting and reporting which ...

Lease Accounting

Lease is an agreement between two parties whereby the owner of the asset, known as Lessor, allows the lessee to use his asset for contractual time period in return of fixed periodic payments.

In terms of accounting treatment; Leases are of two types:

- Finance Lease - Operating Lease A Finance lease is generally executed with an equal borrowing amount for purchase of an asset. Thus, since the asset is borrowed with a debt, an equal amount is added on asset and liability side of company’s balance sheet. Over the years, for the asset recorded in the balance sheet, company charges depreciation expenses on the asset and ...