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IFRS and GAAP Reporting Standards

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For convergence of FASB and IASB reporting standards, you describe recommendations for resolving differences and your opinion which is better for company.

1. Revenue Recognition,

2. Fair Value,

3. Pension and Retirement Benefits,

4. Leases and Cash Flows

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Solution Summary

This solution discusses revenue recognition, fair value, pension and retirement benefits and leases & cash flows.

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The FASB are generally known as GAAP, generally accepted accounting principles.

IASB is primarily principle-based while U.S. GAAP is rules-based.

The difference between approaches between IASB and FASB is in the methodology used in accounting. Under GAAP (FASB) the practices are focused on what the rules for reporting are.

There are four objectives of IASB:
1. Accrual based accounting
2. The foreseeability of a company or organization (its longevity)
3. Assumption that there is some stability in the organization and its processes
4. The ability to purchase goods and services as needed without any encumbrance

There are ten objectives of GAAP / FASB:
1. Regularity
2. Honesty
3. Consistency
4. Access to company information
5. Distinguishing assets from liabilities
6. Keeping things as clear as possible (prudence)
7. The foreseeability of a company or organization (its longevity)
8. Regular accounting periods
9. Full disclosure to clients, staff and general public
10. Disclosure to other businesses, especially insurers



The difference between fund financial statements and government-wide financial statements:

Government and non-profit organizations do not have profiteering as a major goal, so they use a system of accounting called fund accounting. Fund accounting categorizes financial data into funds or accounts that are similar to one another. For example, money for building something might go into a construction account. Fund accounting ...

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