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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 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.

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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 ...

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