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    IFRS vs GAAP

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    The IFRS is considered to be principle based, while U.S. GAAP is rules based.

    Discuss what principle-based and rule-based accounting practices mean with regard to their application.
    To prove your point, give an explanation of at least 1 example of IFRS and its U.S. GAAP parallel.
    In your opinion, is IFRS or GAAP more prone to possible ethical concerns? Why or why not?

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    Solution Preview

    First, it will help to understand the difference between principle-based and rules-based accounting. IFRS is principle-based while U.S. GAAP is rules-based. Here's an article explaining the differences: http://www.investopedia.com/ask/answers/06/rulesandpriciplesbasedaccounting.asp#axzz1bVpGGhkf

    The difference between these two approaches is in the methodology used in accounting. Under U.S. GAAP, the research is more focused on the ...

    Solution Summary

    This solution explains the differences between rules based and principles based accounting procedures. Additionally, this solution includes links to various reference sources for further research of the topic.