The convergence of IFRS from US GAAP accounting is fast approaching there are differences in the two set standards. The following are listed by the AICPA:
- Last-In First-Out (LIFO) not permitted as an inventory costing method in IFRS.
- IFRS uses a single-step method for impairment write-downs rather than the two-step method used in U.S. GAAP, making write-downs more likely.
- IFRS has a different probability threshold and measurement objective for contingencies.
- IFRS does not permit curing debt covenant violations after year-end.
- IFRS guidance regarding revenue recognition is less extensive than GAAP and contains relatively little industry-specific instruction.
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