...Comparing IFRS to GAAP ACC/290 June 5, 2016 Arin Smith Comparing IFRS to GAAP As international business increase those with financial responsibilities should be well versed in the two primary accounting methods: GAAP (Generally Accepted Accounting Principles) and IFRS (International Financial Reporting Standards). The Financial Accounting Standards Board set the GAAP which is primarily used in the United States and the IFRS is used in several other countries. It has been reported that the United States Security and Exchange Commission is planning to switch to IFRS in 2015 (Logue, 2011). While the two accounting methods share some similarities, there are some differences that could result in different reporting. Having a good understanding of both methods will allow companies to make business decisions that are effective and compliant. 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? In my understanding, the IFRS does not give any specific order for the statement of financial position. If anything the, IFRS requires separation of current and noncurrent assets and liabilities. For a lot of the companies today they just report their assets in reverse order based off their liquidity. Now, the GAAP recommends separation of current and noncurrent assets and liabilities and also. require that all the accounts be in a specific ordered based on the liquidities hierarchy. IFRS 2-2:...
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...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...
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...Comparing IFRS to GAAP Paper Ashley Connors ACC/290 Sharon Powers Comparing IFRS to GAAP Paper The comparison between the IFRS and GAAP and how they differ from one another. The accounting industry has many guidelines that need to be followed by accountants, analysts, and organizations. The internal Accounting Standards Board issued standards (IFRS) that have been adopted by the United States and several countries out of the U.S. In what ways does the format of a statement of financial or position under IFRS often differ from a balance sheet presented under GAAP? The format of a statement of finical or position under IFRS differ a balance sheet presented under GAAP in the following ways. IFRS does not require a certain order or classification of accounts on the statement of finical position. Companies are recommended to report assists in reverse order of liquidity. Making sure the users of finical statements have a clear understanding of the company’s structure is important. An example of the order of accounts on the statement of finical position is: * Long Term Assets * Current Assets * Shareholder Equality * Long Term Liability * Current Liabilities GAAP requires that all accounts are ranked on their measureable liquidly. Cash assets will be ordered first and shareholder equity will be ordered last. * Current Assets * Long Term Assets * Current Liabilities * Long Term Liabilities * Shareholder Equity What...
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...Ricky Green ACC/290 Comparing IFRS to GAAP Essay 9- 21-15 Sherrick Johnson Introduction Comparing IFRS and GAAP, and understanding how the fair value measurement help organizations keep accurate reporting of the company’s assets. Organizations under GAAP and IFRS have different requirements when using Component depreciation methods. The revaluation of plant assets changes when the economic market changes. Explaining the difference between development cost and development expenses, and how the GAAP and IFRS report the accounts on the finical statements. The understand organizations Contingency liabilities accounts are reported, and the principals of accounting for liabilities amongst the GAAP and IFRS. IFRS 8-1 The fair value measurements give people who use finical statements with an accurate picture of the value in a company’s assets. ISAB and FASB require organizations to provide truthful information concerning fair value practices in their financial statement notes. GAAP and IFRS both require organizations to state assets at book value or fair value, depending on the situation. Both systems have a disciplinary action in place if violations of fair value measurements occur. IFRS 9-1: Component depreciation is when an asset has different components that are depreciated with different treatment. Under IFRS organizations are obligatory to use component depreciation if the components of the asset are varying different patterns of benefits. This method...
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...Comparing IFRS to GAAP ACC/290 7-14-2015 Howard Pickering Comparing IFRS to GAAP As International business increases, those with financial responsibilities should be well versed in the two primary accounting methods: GAAP (Generally Accepted Accounting Principles) and IFRS (International Financial Reporting Standards). The Financial Accounting Standards Board set the GAAP which is primary used in the United States and the IFRS is used in several other countries. If the United States where to every switch to IFRS, they would need to get a good understanding of the difference and acknowledge the similarities. This will only make for better business decisions. “The IASB and FASB are working on a project that would rework the structure of financial statements. Specifically, this project will address the issue of how to classify various items in the income statement. A main goal of this new approach is to provide information that better represents how businesses are run. In addition, this approach draws attention away from just one number—net income. It will adopt major groupings similar to those currently used by the statement of cash flows (operating, investing, and financing), so that numbers can be more readily traced across statements.” (Wiley, 2013) 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? The GAAP requires accounts to be listed in a specific order based on liquidity...
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...Comparing IFRS to GAAP Michaela Lyons ACC/290 03/28/2016 Sharon Powers Comparing IFRS to GAAP This collaborative team experience has been quite motivating and has really pushed me to research the information extensively to ensure my personal understanding. My team didn’t exactly connect easily and it really pushed me to develop my understanding on my own. Although that isn’t the ideal outcome in a team setting, however in my opinion it actually helped me push further. GAAP is the US Generally Accepted Accounting Principles, the accounting standard used in the United States, while IFRS the International Financial Reporting Standards is used in a vast amount of countries around the world (Tilea, D. M., Bleotu, V., & Serban, A. A. M. (2013)). The Contrast IFRS does not command an exact order or classification of accounts on the statement of financial position. In most cases, companies report assets in reverse order of liquidity. GAAP explicitly requires that all accounts be ordered based on their degree of liquidity. Consequently, cash is usually reported first and non-current assets will be reported last. GAAP and IFRS sustain comparable perspectives on the neutrality of monetary data. It’s contracted that economic reporting data should be pertinent and loyally signified. Material that is pertinent is anything that could be viewed as useful in the eyes of an investor, creditor, or regulator. Material that is loyally signified...
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...Comparing IFRS to GAAP Donald Cleveland University of Phoenix Kurt Meyer ACC/290 Author Note [Include any grant/funding information and a complete correspondence address.] Abstract [The abstract should be one paragraph of between 150 and 250 words. It is not indented. Section titles, such as the word Abstract above, are not considered headings so they don’t use bold heading format. Instead, use the Section Title style. This style automatically starts your section on a new page, so you don’t have to add page breaks. Note that all of the styles for this template are available on the Home tab of the ribbon, in the Styles gallery.] Keywords: [Click here to add keywords.] Comparing IFRS to GAAP In the financial industry there is a well-known difference between how the United States operates, and how the rest of the world conducts accounting practices. Generally Accepted Accounting Principles (GAAP) is the accounting standard practiced in the US. International Financial Reporting Standards (IFRS) is the accounting standard used around the world. GAAP is known to have more rules, while IFRS is based more on principle and general acceptance. In this paper GAAP and IFRS will be compared and contrasted in a brief overview. IFRS 2-1 The main difference between the formatting of IFRS and GAAP statement of financial of position and a GAAP balance sheet is the ordering of liquidity. IFRS does not require a particular order or any classification of accounts. It is common for companies...
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...Comparing IFRS to GAAP Nicole A. Walker ACC/290 September 7, 2015 Linda Gandy Comparing IFRS to GAAP International Financial Reporting Standards or IFRS for short, is the standard method of accounting that is used in a little more than 110 counties in the world. US Generally Accepted Accounting Principles, GAAP for short, is the method of accounting that is used regularly in the United States. International Financial Reporting Standards is more “principles based” method, while the US Generally Accepted Accounting Principles is more “rules based” accounting system. IFRS 2-1: In what ways does the format of a statement of financial position under IFRS often differ from a balance sheet presented under GAAP? IFRS guidelines do not specify a certain format. Companies usually report their assets in reverse order. IFRS financial statements have current and noncurrent assets and then current and noncurrent liabilities listed separately on their balance sheet. GAAP requires that accounts are ordered based on what could be liquidized first. Cash, assets, liabilities and equity in that order. (Epstein, 2013) IFRS 2-2: Do the IFRS and GAAP conceptual frameworks differ in terms of the objective of financial reporting? Explain. No, from what I have read about the IFRS and GAAP it seems to me that both authorities believe in reporting accurate and relevant information. The information is relevant in the eyes of a creditor or regulator and should be accurate to conform to either...
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...Jennifer Linnell Comparing IFRS to GAAP ACC 290 Katherine Conrad 07/07/2014 The United States are transitioning from GAAP to IFRS. While trying to understand and compare IFRS and GAAP, we see how the United States will be affected by this change, as well as see if the United States will benefit and prosper from using IFRS instead of GAAP. In what ways does the format of a statement of financial position under IFRS often differ from a balance sheet presented under GAAP? IFRS will refer to a statement of financial position as the statement of assets and equity. IFRS will present statements of financial position information in a certain order; Non-current assets, current assets, equity, non-current liabilities, and current liabilities. While IFRS is presented in a certain order, GAAP assets are listed in the order that they are expected to be converted into cash. GAAP specifically requires all accounts to be ordered based on their degree of liquidity. Cash is reported first and non-current assets are reported last. An example of a GAAP balance sheet order would be; Current assets, long term assets, current liabilities, long term liabilities, and shareholder equity. (Kieso, D.E, Kimmel, P.D., & Weygandt, J.J., 2014) Do the IFRS and GAAP conceptual frameworks differ in terms of the objective of financial reporting? When it comes to the terms of objective, IFRS and GAAP conceptual frameworks do not differ. Both IFRS and GAAP focus on setting a set of accounting principles...
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...GAAP vs. IFRS Giovanni Flores Johanna Guedea Orlando Muñoz ACC/290 March 10, 2015 Stephen Russell GAAP vs. IFRS For a long time, there have been proposals that have been working on with regard to the replacement of GAAP also known as Generally Accepted Accounting Principles with IFRS known as International Financial Reporting Standards which are used in the accounting and financial reporting aspects. But what is it that makes them both so different and so similar? It all falls into the comparison of GAAP and the IFRS in explaining the two standards that have such enormous implications for the functions of accountants, attorneys, corporate directors and financial officers now in days. The differences and similarities between IFRS and GAAP can be quite overwhelming. Starting with the format of a statement or financial or position under IFRS how it often differs from a balance sheet presented under GAAP. Ifrs does not require a particular order or classification of accounts on the statement of financial position when GAAP does have a specific requirement that all reports are ranked on their measure liquidity. The primary goal in IFRS is to give users of financial statements a clear understanding of the companies asset structure. After the asset structure and the shareholder are reported, liabilities follow ending the financial statement, unlike IFRS, GAAP orders liquid assets first and the shareholder equity is reported very last on the balance...
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...FFA PAPER F3 FINANCIAL ACCOUNTING BPP Learning Media is the sole ACCA Platinum Approved Learning Partner – content for FIA and ACCA qualifications. In this, the only FFA/F3 study text to be reviewed by the examiner: We highlight the most important elements in the syllabus and the key skills you will need We signpost how each chapter links to the syllabus and the study guide We provide lots of exam focus points demonstrating what the examiner will want you to do We emphasise key points in regular fast forward summaries We test your knowledge of what you’ve studied in quick quizzes We examine your understanding in our exam question bank We reference all the important topics in our full index I N T E R A C T I V E T E X T BPP’s Practice & Revision Kit, i-Pass and Interactive Passcard products also support this paper. Note FIA FFA and ACCA Paper F3 are examined under the same syllabus and study guide. FOR EXAMS FROM FEBRUARY 2013 TO JANUARY 2014 FFA/F3 FINANCIAL ACCOUNTING First edition March 2011 Second edition September 2012 ISBN 9781 4453 9966 9 Previous ISBN 9781 4453 7305 8 eISBN 9781 4453 9242 4 British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Published by BPP Learning Media Ltd BPP House, Aldine Place 142-144 Uxbridge Road London W12 8AA www.bpp.com/learningmedia Printed in the United Kingdom by Printers Polestar Wheatons Hennock Road Marsh Barton Exeter EX2 8RP Your...
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...solution SOLUTIONS TO EXERCISES AND CASES For FINANCIAL STATEMENT ANALYSIS AND SECURITY VALUATION Stephen H. Penman Fifth Edition CHAPTER ONE Introduction to Investing and Valuation Concept Questions C1.1. Fundamental risk arises from the inherent risk in the business – from sales revenue falling or expenses rising unexpectedly, for example. Price risk is the risk of prices deviating from fundamental value. Prices are subject to fundamental risk, but can move away from fundamental value, irrespective of outcomes in the fundamentals. When an investor buys a stock, she takes on fundamental risk – the stock price could drop because the firm’s operations don’t meet expectations – but she also runs the (price) risk of buying a stock that is overpriced or selling a stock that is underpriced. Chapter 19 elaborates and Figure 19.5 (in Chapter 19) gives a display. C1.2. A beta technology measures the risk of an investment and the required return that the risk requires. The capital asset pricing model (CAPM) is a beta technology; is measures risk (beta) and the required return for the beta. An alpha technology involves techniques that identify mispriced stocks than can earn a return in excess of the required return (an alpha return). See Box 1.1. The appendix to Chapter 3 elaborates on beta technologies. C1.3. This statement is based on a statistical average from the historical data: The return on stocks...
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...CMA Ontario Accelerated Program FINANCIAL ACCOUNTING IFRS MODULE 1 Financial Accounting – Module 1 Table of Contents 1. Financial Statements and the Conceptual Framework 2. The Statement of Cash Flow 3. Revenue Recognition 110 4. Cash 139 5. Accounts Receivable 147 6. Notes Receivable/Payable 163 7. Inventory 187 8. Capital Assets 214 9. Liabilities 278 10. Shareholders’ Equity 310 11. Accounting for Pensions 341 12. Earnings per Share 384 13. Accounting for Leases 405 14. Accounting for NonProfit Organizations 437 15. Financial Statement Analysis 475 Page 2 3 77 CMA Ontario – September 2009 Financial Accounting – Module 1 1. Financial Statements and the Conceptual Framework The purpose of this section is to provide a high level review of the accounting cycle, the preparation of financial statements and the conceptual framework. If you are reading this before the course has started, we recommend that you spend as much time as you can working in the Financial Accounting Primer that you received with the course materials. In fact, we would recommend that you only spend time working with the primer until the day the course starts. Chapter 1 of the FA Primer should be read as a preamble to this chapter. The Accounting Cycle The accounting cycle describes the process whereby individual transactions get compiled to eventually becoming financial statements. The cycle is as follows: 1. Transaction: the company enters into a transaction...
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