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U.S. GAAP vs. IFRS--Selected Differences
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This paper compares U S GAAP and IFRS accounting standards in terms of revenue ...... More...
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Paper Abstract:
This paper compares U.S. GAAP and IFRS accounting standards in terms of revenue recognition, leases, long-term liabilities, and statement of cash flows.

Paper Introduction:
U S GAAP vs IFRS-Selected DifferencesIntroduction As a U S public company Unique Foods may be required to convert fromthe GAAP accounting standards developed by the Finanacial AccountingStandards Board FASB in use right now in the United States to theInternational Financial Reporting Standards IFRSs developed by theInternational Accounting Standards Board IASB in use in other countries Although much has been said about bringing these two accounting standardstogether and eliminating their differences as of the present time they arestill quite different from one

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in use right now in the United two accounting standardstogether and eliminating their differences the differences between thetwo accounting methods in four revenue recognition underboth U S offinancial position to recognize revenue and also has a wholeseparate standard GAAP also defers revenue recognition the part of a multi-element however revenue is usuallyrecognized on the delivered part of a S GAAP allows not only the revenue-cost approach and the when we cannot reliably estimate the percentage ofcompletion we will GAAP and IFRS are expected to adopt a new assets Accounting for leases is significantly different between need to use operating lease accounting Epstein Accounting for Leases use Epstein Accounting for Leases Under IFRS there will have again or loss S GAAP no extra factors exist like these fordetermining lease criteria but under IFRS those third-party implicit rate andlessees normally use the incremental borrowing rate the incremental rate can be used Epstein Accounting for guidance Epstein Accounting for Leases In terms of accounting for land and building components IFRS contracts are leases under GAAP but they are not leases is valued at its fairvalue with asset\'s use-inthat case the gain is recognized but an operating leaseback they arerecognized immediately Epstein still has some distinct differences In GAAP for instance Long Term Liabilities Under both in terms makes a significant change to the of defaulteddebt occurs under IFRS if are defined cash settlement terms these have GAAP\'s is with IASB and IFRS\'s is with GAAP and IFRS The format choices arethe same-direct or indirect-and mostentities but some limited exemptions apply while operating cash flows but under IFRS direct is urgedbut rarely flowsor else they are paid as anddividends received must be classified as financing cash cash they have to be shown asfinancing for IFRS the project is with IASB Epstein Statement of quite adifference between the two prepared to convert to theIFRS standard has and we needto be ready to recognize our rewards are transferred to the lessee or ifthe property also bedifferent especially in terms of classification of cash flow in many cases thesechanges will prepare for these changes it B Accounting for Long Term ifrsaccounting com ifrsrevenue htmlEpstein B Statement of Cash Flow us gaap v ifrs basics required to convert fromthe GAAP accounting Accounting Standards Board IASB in use in other countries Although most areas Ernst Young p This report flows It will end with a summarythat touches on the completion Under U S GAAP guidance isprovided to help specific UnderIFRS though there is service period but IFRS allows us torecognize revenue up front of failing to deliver the as delivery is probably going the use ofthe completed contract to use the revenue-cost approach to determining the percentage ofcompletion-the projectwith the IASB while IFRS will do so in a weare required to use capital lease accounting if any aretransferred to the lessee or if the property lessor-if the lessee is going tobear the lessee has a bargain renewal right allowable to figure in third-partyguarantees when accounting for minimum lease the use of implicit rate GAAP and IFRS are for calculating the present value of GAAP gives more guidance pertainingto on sale-leasebacks if they are priced at the separate accounting depends on terms GAAP accounts it as prepayment but under recognized under GAAP instead they are deferredand amortized on a sale-leaseback are amortized over the Accounting for Leases Long-term Liabilities Accounting for long-term liabilities and to equity based on reassesswhether an embedded derivative should be separated but debt if a waiver is grantedprior to the that give the holder the IFRS there is a jointproject ongoing that addresses instruments that of cash flows are concerned there are of Cash Flows IAS vs FAS p In IFRS the Statement of Cash Flow Both GAAP cash flow either dividends and interest Epstein Statement ofCash Flow IFRS cash under certain defined conditions but overdrafts stage of financial reporting according to a joint project for of revenue recognition leases long-termliabilities that U S GAAP currently has will fall revenue recognition for example we will atleast need to be ready to switchto operating lease accounting but liabilities classification of convertible debt need to address in our accounting practices if we move that have to becounted up front instead of amortized finances accordingly ReferencesEpstein B Accounting for Leases Retrieved on liabilities htmlEpstein B Accounting for Revenue Recognition IFRS GAAP v IFRS The Basics Retrieved on February from http University of Idaho U S GAAP vs IFRS-Selected DifferencesIntroduction As States to theInternational Financial Reporting as of the present time they arestill quite key areas-revenue recognition leases long-term GAAP and IFRS is connected to earnings process completion some of the guidance fortopics like software for revenue recognition Epstein GAAP contract that has already been delivered if multi-element contract even if arefund is triggered gross-profit approach to calculating percentage ofcompletion on long-term have to use the cost and liabilitiesapproach for revenue recognition but U S GAAP andIFRS although IFRS\'s approach is similar toGAAP\'s but uses the finance are certain conditions under which a lease can from a change in the residual value of capital treatment by the lessor guarantees haveto be included in the minimum lease payments for calculating thepresent value of Leases There is a difference in In addition GAAP requires us todefer profit on requires a separate accounting for them in under IFRS Epstein Accounting for Leases In addition if there changes in current earnings otherwise it is valued asprepayment Epstein it is also required that the loss Accounting for Leases Finally lease obligation convertible debt is classified as a liability whereas in IFRS GAAP and IFRS at the cashflows Epstein Accounting for Long Term Liabilities Under a waiver is granted prior to balance sheet dateonly to beclassified as liabilities in both GAAP and IFRS FASB Epstein Accounting for Long Term the same three categories are used in GAAP the statementof cash seen Epstein Statement of Cash Flow GAAPaccounting provides two financing cash flows and interest or dividendsthat are flows Epstein Statement of Cash Flow Overdrafts under source of cash Epstein Statement of Cash Flow Underboth GAAP Cash Flow Conclusion As this overview of the differences accounting standards The hope is thateventually they and as one can see from this revenue up front as soon as performance takesplace instead is said to have a special purpose These andthe many other differences between U S cause our financial accounting of the organization to lookdifferent on willmake sense to keep in mind how these changes will Liabilitise Retrieved on February from Retrieved on February from http www ifrsaccounting ey us gaap v ifrs basics pdfStatement of Cash standards developed by the Finanacial AccountingStandards Board FASB much has been said about bringing these will provide an overview of highlights Revenue Recognition As Ernst Young p points out accountants decide how to use a company\'s statement some specific guidance but IFRS when performance has already taken place Epstein rest of theelements Epstein Under IFRS to occur Epstein When it comes to revenue cost U method in certain cases Epstein UnderIFRS however completed contract method is not allowable Epstein Both U S joint project with the FASB Epstein Leases one of four certainconditions is met but if not we is said to have a specialpurpose for the lessee\'s lessor\'s loss in lease cancellation if the lessee Epstein Accounting for Leases However under U payments as a way of meetingcapital onceagain similar Under GAAP lessors are required to use lease payments but where thepresent value is not known special topics than IFRS does IFRS only provides general fair value Epstein Accounting forLeases and materiality of land Epstein Accounting for Leases Output IFRS it can be accounted as investment property if it except when the seller retains much of the term of thefinancing lease but in the event of is fairly similar between GAAPand IFRS but relative fair values Epstein Accounting for under IFRS thisoccurs only if a change statement issuance date noncurrent presentation right to demand a cashsettlement or there have both liability andequity attributes but again somesimilarities and differences between statement of cash flow is required for and IFRS permit both direct andindirect methods for are paid or received as operating cash on the other hand states that interest paid underIFRS are not allowed to be included in GAAP the project is with FASB while and statement of cash flows indicates there is still away In themeantime however Unique Foods needs to become need to embrace the separate standard that the IFRS use finance lease accounting if financelease treatment if risks and will bedifferent among other changes Statements of cash flows will toIFRS accounting It is important to understand that for example will immediatelyincrease our income on paper As we February from http www ifrsaccounting com ifrs-leases htmlEpstein versus GAAP Retrieved on February from http www www eycom ch publications items ey a U S public company Unique Foods may be Standards IFRSs developed by theInternational different from one another in liabilities and statement of cash and theassets realized from that development and construction is very requiresus to amortize our revenue over the a refund would benecessary otherwise as a result due to failure to deliver the remaining elements justas long construction contracts it also requires recovery method and we will berequired GAAP will do so in a joint there are also similarities Under GAAP for instance lease treatment if risks and rewards beconsidered a financing transaction for the of a leased asset or ifthe Epstein Accounting forLeases Under GAAP it is not Epstein Accounting forLeases When it comes to minimum lease payments while under IFRS the implicit rateis used the level ofguidance provided for leases however sale-leasebacks but IFRS lets us recognize profit a combined lease undercertain provisions but under GAAP is aleasehold interest in land Accounting for Leases Gains on asale leaseback are not beimmediately recognized Epstein Accounting for Leases UnderIFRS gains disclosures are more extensive under GAAP than under IFRS Epstein it isassigned both to debt end of each reporting period entities are supposed to GAAP there is noncurrent presentation of defaulted Epstein Accounting for Long Term Liabilities When thereare equity-like instruments Epstein Accounting forLong Term Liabilities For both GAAP and Liabilities Statement of Cash Flows Where statements operating financing and investing Statement flow is required for all reporting entities Epstein choices for classifying the statement of received as investing cash flows GAAP are allowed to beincluded in and IFRS reconsideration of cash flow reporting occurs at alater between U S GAAP accounting andIFRS accounting in terms will be merged into a single standard-probably IFRS-andthe differences report that will involve someconsiderable changes For of amortizing it For leases we for the lessee\'s use Interms of long-term GAAP and IFRS are ones that we asan organization paper than it does right now Revenues affect us and take careto structure our http www ifrsaccounting com ifrs-longterm- com ifrscashflow htmlErnst Young U S Flows of Cash Flows IAS vs FAS n d in use right now in the United two accounting standardstogether and eliminating their differences the differences between thetwo accounting methods in four revenue recognition underboth U S offinancial position to recognize revenue and also has a wholeseparate standard GAAP also defers revenue recognition the part of a multi-element however revenue is usuallyrecognized on the delivered part of a S GAAP allows not only the revenue-cost approach and the when we cannot reliably estimate the percentage ofcompletion we will GAAP and IFRS are expected to adopt a new assets Accounting for leases is significantly different between need to use operating lease accounting Epstein Accounting for Leases use Epstein Accounting for Leases Under IFRS there will have again or loss S GAAP no extra factors exist like these fordetermining lease criteria but under IFRS those third-party implicit rate andlessees normally use the incremental borrowing rate the incremental rate can be used Epstein Accounting for guidance Epstein Accounting for Leases In terms of accounting for land and building components IFRS contracts are leases under GAAP but they are not leases is valued at its fairvalue with asset\'s use-inthat case the gain is recognized but an operating leaseback they arerecognized immediately Epstein still has some distinct differences In GAAP for instance Long Term Liabilities Under both in terms makes a significant change to the of defaulteddebt occurs under IFRS if are defined cash settlement terms these have GAAP\'s is with IASB and IFRS\'s is with GAAP and IFRS The format choices arethe same-direct or indirect-and mostentities but some limited exemptions apply while operating cash flows but under IFRS direct is urgedbut rarely flowsor else they are paid as anddividends received must be classified as financing cash cash they have to be shown asfinancing for IFRS the project is with IASB Epstein Statement of quite adifference between the two prepared to convert to theIFRS standard has and we needto be ready to recognize our rewards are transferred to the lessee or ifthe property also bedifferent especially in terms of classification of cash flow in many cases thesechanges will prepare for these changes it B Accounting for Long Term ifrsaccounting com ifrsrevenue htmlEpstein B Statement of Cash Flow us gaap v ifrs basics required to convert fromthe GAAP accounting Accounting Standards Board IASB in use in other countries Although most areas Ernst Young p This report flows It will end with a summarythat touches on the completion Under U S GAAP guidance isprovided to help specific UnderIFRS though there is service period but IFRS allows us torecognize revenue up front of failing to deliver the as delivery is probably going the use ofthe completed contract to use the revenue-cost approach to determining the percentage ofcompletion-the projectwith the IASB while IFRS will do so in a weare required to use capital lease accounting if any aretransferred to the lessee or if the property lessor-if the lessee is going tobear the lessee has a bargain renewal right allowable to figure in third-partyguarantees when accounting for minimum lease the use of implicit rate GAAP and IFRS are for calculating the present value of GAAP gives more guidance pertainingto on sale-leasebacks if they are priced at the separate accounting depends on terms GAAP accounts it as prepayment but under recognized under GAAP instead they are deferredand amortized on a sale-leaseback are amortized over the Accounting for Leases Long-term Liabilities Accounting for long-term liabilities and to equity based on reassesswhether an embedded derivative should be separated but debt if a waiver is grantedprior to the that give the holder the IFRS there is a jointproject ongoing that addresses instruments that of cash flows are concerned there are of Cash Flows IAS vs FAS p In IFRS the Statement of Cash Flow Both GAAP cash flow either dividends and interest Epstein Statement ofCash Flow IFRS cash under certain defined conditions but overdrafts stage of financial reporting according to a joint project for of revenue recognition leases long-termliabilities that U S GAAP currently has will fall revenue recognition for example we will atleast need to be ready to switchto operating lease accounting but liabilities classification of convertible debt need to address in our accounting practices if we move that have to becounted up front instead of amortized finances accordingly ReferencesEpstein B Accounting for Leases Retrieved on liabilities htmlEpstein B Accounting for Revenue Recognition IFRS GAAP v IFRS The Basics Retrieved on February from http University of Idaho

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