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How do GAAP and IFRS differ?

The U.S. is scheduled to begin moving from Generally Accepted Accounting Principles (GAAP) to IFRS by 2014. At least three questions are worth discussing:

1. How do GAAP and IFRS differ?

2. What might the consequences be for financial managers, apart from financial reporting / controllers?

3. The IFRS move was the creation of the SEC under Christopher Cox (a Bush appointee). Mary Schapiro, the current head, may defer the implementation. Should she?

I have seen comments on and elsewhere that early knowledge of IFRS might be a career-enhancing asset. Do you agree?

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How do GAAP and IFRS differ?

GAAP and IFRS differ in a number of ways which the fact that GAAP allows a contract to be recognized in financial statements while IFRS standard of accounting recognizes an uncompleted contract based on percentage of completion (Ernst & Young, 2007). They also differ in valuing inventory whereby GAAP allows inventory to be valued based on FIFO, LIFO and weighted average methods. On the other hand IFRS accounting standard does not allow inventory to be valued based on LIFO method (Ernst & Young, 2007). The accounting standards also ...

Solution Summary

How GAAP and IFRS differs in United States are examined.