IFRS
AC114
July 15, 2014
IFRS
I. Introduction
II. Global Finance Change
III. Conclusion
In todays’ businesses, the need to be financially bilingual is a must. In the US, we have the
US GAAP (Generally Accepted Accounting Principle) and for other countries there is
IFRS (International Financial Reporting Standards) which it all relates to financial
regulations. The need for accountants to know the rules and regulations for IFRS has
increased rapidly. US businesses are making business transaction within the globe and US
accountants need to know IFRS. Now there is a possible global finance change if the US
GAAP combines the IFRS rules and regulations to be just one standard law. Can this
change benefit the US or the other countries?
Global Finance Change
As per David Schmid (2013) “as more companies look outside their borders for potential
buyers, targets, and capital, knowledge and understanding of IFRS becomes increasingly
important.” Which means more Americans will need to understand the regulations for
IFRS to be internationally bilingual in the accounting world. The difference in US GAAP
and IFRS is the performance elements, the required documents in financial statements,
inventory estimates, inventory reversal, and underlying assumptions just to name a few.
The difference in performance elements in GAAP, the accountant, will need to provide the
revenue or expenses, assets or liabilities, gains, losses, and comprehensive income. With
IFRS the accountant will need is the revenue or expenses, assets or liabilities, much less
than GAAP. For the inventory estimates GAAP requires LIFO (Last-in, first-out), FIFO
