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Convergence of International and US Accounting Principles and IFRS

list of international accounting standards

IAS 1 Presentation of Financial Standards has four financial statement requirements that businesses must submit to have satisfied the standard. A statement of financial position, profit or loss statement, or some other document showing a comprehensive list of income, changes in equity or ownership, and cash flow statements. GAAP is a common set of generally accepted accounting principles, standards, and procedures. U.S. public companies must follow GAAP for their financial statements.

GAAP. Many of those are topics in which IASC standards provide definitions of terms that are not explicitly defined in U.S. GAAP or that relate to display or disclosure requirements not specified in U.S.


In this release, we discuss a number of issues related to the infrastructure for high quality financial reporting. We solicit views on the elements necessary for developing a high quality, global financial reporting framework for use in cross-border filings. We believe these issues should be considered in the development of any proposals to modify current requirements for enterprises that report using IASC standards because our decisions should be based on the way the standards actually are interpreted and applied in practice. Because of increasing cross-border capital flows, we and other securities regulators around the world have an interest in ensuring that high quality, comprehensive information is available to investors in all markets.

Over the last two decades, the global financial landscape has undergone a significant transformation. These developments have been attributable, in part, to dramatic changes in the business and political climates, increasing global competition, the development of more market-based economies, and rapid technological improvements. At the same time, the world’s financial centers have grown increasingly interconnected. There was, however, considerable discussion regarding the role that various stakeholders, such as regulators and public accounting firms, play in interpreting principles-based standards.

International GAAP® 2022

An analysis of the differences, however, could serve as a useful tool for highlighting what differing information might be provided in financial statements prepared using IASC standards compared with U.S. GAAP financial statements.26 If the differences between the IASC standards and U.S.

list of international accounting standards

As a result, most business combinations would be accounted for by the purchase method under IAS 22. IASC standards do not provide recognition guidance for changes in reporting entities.


A business combination that is accounted for as a pooling of interests is reflected in subsequent financial statements by combining the financial statement items of each enterprise, for the most part, at their existing carrying amounts. Under both IAS 22 and Opinion 16, if a business combination does not qualify as a pooling of interests, list of international accounting standards it must be accounted for under the purchase method. On the other hand, an absence of implementation guidance can lead to differences in applying standards that are broadly similar. GAAP counterpart, FASB Statement No. 128, Earnings per Share, resulted from a cooperative standard-setting effort between the IASC and the FASB.

list of international accounting standards

As some of the comparative analyses in this report show, some of the IASC standards and their U.S. GAAP counterparts do have a similar underlying approach to accounting in certain areas and it may be possible to arrive at similar results under both standards. However, the existence of alternatives, even within standards that are very similar, can create the potential for very different reported results. The comparative analysis of IAS 23, Borrowing Costs, provides an example. The allowed alternative treatment in IAS 23 requires capitalization of borrowing costs incurred in the acquisition, construction, or production of certain assets.

International Financial Reporting Standards Foundation

As per the list of IFRS and IAS standards, IAS 7 reflects the cash flow statements. Within the scope of the standard, IFRS 17 provides the criteria for the recognition, measurement, presentation, and disclosure of insurance contracts. GAAP results from different objectives and processes, a qualitative assessment of the positive or negative impact of differences depends on the context in which the standards are intended to be applied.

list of international accounting standards

GAAP is applied include the following areas identified in the comparative analyses. A more common type of difference identified in the comparative analyses is that in which the two standards specifically require the same item to be treated differently. Expense for equity compensation benefits is not recognized under IAS 19. GAAP requires recognition of an expense for certain types of equity compensation benefits. In responding to the requests for comment set forth below, please be specific in your response, explaining in detail your experience, if any, in applying IASC standards, and the factors you considered in forming your opinion. Please consider both our mandate for investor protection and the expected effect on market liquidity, competition, efficiency and capital formation.

IFRS bans the use of the last in, first out inventory cost method while GAAP allows businesses to use any acceptable inventory cost accounting method. In 2003, IFRS was introduced to be used for international financial reporting as the result of the effort of the International Accounting Standards Board , which was founded in 2001. Diversified Company’s reportable segments are strategic business units that offer different products and services. They are managed separately because each business requires different technology and marketing strategies. Most of the businesses were acquired as a unit, and the management at the time of the acquisition was retained. If an entity changes its internal structure that causes the composition of its reportable segments to change the corresponding information for earlier periods should be restated unless the information is not available and the cost to develop would be excessive. Judgement is applied in determining what threshold would be considered a significant increase in credit risk.

If you considered additional criteria, please identify them. Q.9 Are there mechanisms or structures in place that will promote consistent interpretations of the IASC standards where those standards do not provide explicit implementation guidance? In some jurisdictions the local accounting profession may have a system of quality assurance. However, structures focused on national organizations and geographic borders do not seem to be effective in an environment where firms are using a number of affiliates to audit enterprises in an increasingly integrated global environment.

Fair Value Measurement

Adjustments to the financial statements are only included if included by CODM for measuring a segment’s profit or loss. Similarly, only assets used by CODM shall be reported for that segment. 15 See Grace Pownall and Katherine Schipper, «Implications of Accounting Research for the SEC’s Consideration of International Accounting Standards for U.S. Securities Offerings» in Accounting Horizons, September 1999.

  • Providing an effective and timely disciplinary process when individuals or firms have not complied with applicable firm or professional standards.
  • Those differences occur in the areas of business combinations, consolidation policy, presentation of financial statements, segment reporting, and certain transition provisions.
  • 28 Fifteen of the 31 core standards are new or have been revised significantly as part of the core standards project, and most of these standards have required adoption dates in 1999, 2000 or 2001.
  • The allowed alternative treatment requires capitalization of borrowing costs as part of the cost of an asset to the extent the borrowing costs are attributable to the acquisition, construction, or production of a qualifying asset.
  • Questions about the credibility of an entity’s financial reporting are likely where the differences highlight how one approach masks poor financial performance, lack of profitability, or deteriorating asset quality.
  • No asset is recognized by the lessee if the lease is classified as an operating lease.
  • IFRS standards are International Financial Reporting Standards that consist of a set of accounting rules that determine how transactions and other accounting events are required to be reported in financial statements.

GAAP. In fact, in several instances the staff encouraged the IASC to benefit from U.S. experience with a particular component of U.S. Currently,42 the business of the IASC is conducted by a Board with 16 voting delegations43 and five non-voting observer delegations with the privilege of the floor.44 Each delegation includes up to three members who share a single vote. Delegation members normally are drawn from the accountancy profession and preparer community; representatives of national standard-setters may be included in a delegation, often as the technical advisor. The Board currently meets approximately four times a year for about a week to receive reports from its staff and steering committees and to discuss and approve exposure drafts and final standards for publication. In order for a set of accounting standards to be fully operational, the standard-setter must support reasonably consistent application of its standards.

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