Tuesday, February 2, 2010

U.S. GAAP vs IFRS - 2014

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.
The key to efficient and effective business is the quality and standardization of processes leading to superior results.  I look forward to US companies being on one accounting standard - IFRS.

“Quality is never an accident; it is always the result of high intention, sincere effort, intelligent direction and skillful execution; it represents the wise choice of many alternatives.” ~ William A. Foster
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