Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following are the differences Between IFRS and U.S. GAAP Consolidation : IFRS favors a control model whereas U.S. GAAP prefers a risks-and-rewards model. Some

The following are the differences Between IFRS and U.S. GAAP

Consolidation: IFRS favors a control model whereas U.S. GAAP prefers a risks-and-rewards model. Some entities consolidated in accordance with FIN 46(R) may have to be shown separately under IFRS.

Statement of Income: Under IFRS, extraordinary items are not segregated in the income statement, while, under US GAAP, they are shown below the net income.

Inventory: Under IFRS, LIFO (a historical method of recording the value of inventory, a firm records the last units purchased as the first units sold) cannot be used while under U.S. GAAP, companies have the choice between LIFO and FIFO (is a common method for recording the value of inventory).

Earning-per-Share: Under IFRS, the earning-per-share calculation does not average the individual interim period calculations, whereas under U.S. GAAP the computation averages the individual interim period incremental shares.

Development costs: These costs can be capitalized under IFRS if certain criteria are met, while it is considered as expenses under U.S. GAAP.

Required

1. Choose one of the main differences between generally accepted accounting principles (GAAP) and international financial reporting standards (IFRS) and fully explain the selected difference.

2. Discuss how that difference impacts financial reporting.

3. Discuss which standard you think is more appropriate to apply to financial accounting and why.

Attention: Please answers for all three questions.

THANKS

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Public Sector Accounting And Auditing In EuropeThe Challenge Of Harmonization

Authors: I. Brusca, E. Caperchione, S. Cohen, F Manes Rossi

3rd Edition

1137461330, 9781137461339

More Books

Students also viewed these Accounting questions

Question

Write short notes on Interviews.

Answered: 1 week ago