Comparing IFRS and GAAP
Vanessa Casey
ACC/290
July 27, 2015

Comparing IFRS and GAAP
As international business is increasing, people with financial responsibilities should be knowledgeable in the two primary accounting methods. The 2 primary accounting methods are GAAP, stands for Generally Accepted Accounting Principles, and IFRS, which stands for International Financial Reporting Standards. The Financial Accounting Standards Board set the GAAP which is used primarily in the United States and the IFRS is used in many other countries. It has been noted that the United States Security and Exchange Commission is planning to switch to IFRS in 2015. There are many differences between the accounting methods that could result in different reporting. However on the same note, they also have some features in common. When having a good understanding of both methods, this will allow the companies to make better business decisions that are flexible and effective.
IFRS 2-1: In what ways does the format of a statement of financial or position under IFRS often differ from a balance sheet presented under GAAP? Accounts are required by the GAAP to be listed by liquidity. Cash would be listed first because it is a current asset whereas a shareholder equity would be last because it is a non-current asset. However, IRFS do not required accounts to be listed in a specific order on the financial statement. Therefore most companies report in reverse order of liquidity. The bottom line is providing a nice clear understanding of the companies’ assets to who use financial statements.
IFRS 2-2: Do the IFRS and GAAP conceptual frameworks differ in terms of the objective of financial reporting? Explain. No, GAAP and IFRS have similar ways in prospects to financial reporting. They both believe financial reporting should be relevant and represented frequently. Any Information that is