Differences between the GAAP and IFRS

 

Differences between the GAAP and IFRS:

There are certain differences between GAAP and the IFRS, which are tabulated below:

IFRS

GAAP

IFRS is the global accounting system used by 110 countries like the EU, South American and Asian countries.

GAAP is the standard accounting system adopted by the USA or United States of America solely.

The system is accounting principles-based.

The system is accounting rules-based.

This accounting system allows the below assets to be revalued according to their fair value, which can be more reliably measured. The assets are property, inventories, investments in securities, intangible assets and plant & equipment.

The revaluation of an asset is not allowed, except for marketable securities.

It allows the reversal of impairment losses for all asset types except goodwill.

It prohibits impairment losses reversal for all asset types.

Long-term assets are cost valued initially and can then be revalued to the prevailing market price.

Assets such as furniture, buildings, equipment etc., are historic cost valued and depreciated suitably.


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