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From an overall perspective, the biggest difference between GAAP and IFRS is that fewer detailed rules and limited industry-specific guidance is provided by IFRS when compared to GAAP. Revenue is an important element of the financial statement and is handled differently by the IFRS and GAAP.

The revenue recognition guidance is highly extensive and detailed and it is based on a significant number of standards issued by the EITF, FASB, SEC and AICPA. On the other hand, revenue recognition under the IFRS is covered by two revenue standards and four revenue focused interpretations. These standards and interpretations are based on general principles without any exception for specific industry and without further guidance.

With GAAP, the focus is on whether revenue is realizable or realized and if it is earned. According to GAAP recognition criteria, no revenue will be recognized until exchange transaction occurs. With the IFRS, revenue transactions related to rendering of services and sales of goods, etc. are covered by two accounting standards. The recognition criteria for the IFRS is probable inflow of economic benefits to the entity and that revenue and cost can be reliably measured. These principles are generally applied without significant exceptions or rules.

The GAAP has a method for recognizing revenue called VSOE (Vendor Specific Objective Evidence). This method allows companies to recognize revenue of specific items on a multi-item scale. This recognition criterion is based o company specific evidence that the product has been delivered. With the IFRS, there is no concept of VSOE. The price of an item that is separately sold on a regular basis is considered best evidence of the fair value of that item.