Comparison of Ifrs and Us Gaap Essay Example for Free

Comparison of Ifrs and Us Gaap Essay Presents the key similarities and differences between IFRS and US GAAP, focusing on the differences commonly found in practice. It takes into account all standards published up to August 2007. IFRS Pocket Guide 2006 Provides a summary of the IFRS recognition and measurement requirements. Including currencies, assets, liabilities, equity, income, expenses, business combinations and interim financial statements. Understanding financial instruments – A guide to IAS 32, IAS 39 and IFRS 7 Comprehensive guidance on all aspects of the requirements for financial instruments accounting. Detailed explanations illustrated through worked examples and extracts from company reports. Contents Page Preface How to use this publication Summary of similarities and differences Accounting framework Financial statements Consolidated financial statements Business combinations Revenue recognition Expense recognition Assets Liabilities Equity Derivatives and hedging Other accounting and reporting topics Foreign currency translation Earnings per share Related-party disclosures Segment reporting Discontinued operations Post-balance-sheet events Interim financial reporting 3 4 12 13 20 25 30 34 39 50 58 59 62 62 63 64 65 67 67 68 69 Index Similarities and Differences – A comparison of IFRS and US GAAP – October 2007 Contents 1 Preface Preface One day we may not need to produce this publication because the world’s capital markets will be using one accounting framework, and there will be no need for a comparison between two sets of standards. However, there is much to do before this can become reality. The International Accounting Standards Board and the U S Financial Accounting Standards Board have been committed to converging IFRS and US GAAP since the Norwalk Accord of 2002. Many commentators have called for convergence to simplify financial reporting and reduce the compliance burden for listed companies, especially those with stock market listings in more than one jurisdiction and those who participate in cross-border, capitalmarket transactions. A major step in the movement to one set of global accounting standards is the Securities and Exchange Commission’s 2007 proposal to drop the requirement for a US GAAP reconciliation by foreign private issuers that prepare their primary financial statements under full IFRS. Another significant step is the 2007 SEC Concepts Release on allowing domestic US registrants to use IFRS as an alternative to US GAAP. These potential changes, if they come to fruition, will significantly alter the international landscape of accounting. US capital-market participants have already started to show a much greater interest in IFRS, realising that it may replace US GAAP as the accounting language underlying future financial reporting and capital-market activity. This will not happen immediately.