Question

Pick one please and defend your answer

Expert Q&A Done Which standard (GAAP or IFRS) presents a more fairly financial statement?

Answer 1

IFRS ( International Financial Reporting Standards ) is the accouting method which is used by Most of the countries across the world..

There are some Main differences between IFRS and GAAP

1.) The methodology used to assess the accounting process is the Major difference between Gaap and Ifrs.

GAAP focus on research and its rule based but IFRS looks at over all patterns and is based on principle.

2.) Under GAAP , A comapco is allowed to use LIFO method for Inventory Estimates...

but in IFRS , LIFO method is not allowed.. How ever LIFO method of Inventory valuation does not reflect and accurate flow of Inventory.. Resulting in Unsusually low income levels...

3.) IFRS is globally accepted.. and can be accepted in more than 110 Countries.. on the other hand . it can be more complicated when doing business Internationally if Used GAAP as it is jot globally accepted in most lf the countries....

4.) under IFRS , Extraordinary items and unusual items are included in the Income statement and not segregated... but in GAAP they are shown below the net income portion of the Income statement....

5.) Ij valuing the Fixed assets..

IFRS uses the Revaluation model which is based on the fair value at current date minus any accumulated depreciation and impairment losses...

But in GAAP.. They use cost model which takes into account the Historical value of the asset minus any accumulated depreciation...

Therefore ,it can clearly seen that The IFRS standards presents more fairly financia Statements...