What are the key differences between GAAP and IFRS?

What are the key differences between GAAP and IFRS?

GAAP (Generally Accepted Accounting Principles) and IFRS (International Financial Reporting Standards) differ in several areas, including revenue recognition, measurement of assets, and the treatment of leases. Would you like a detailed comparison?

Yes, please provide a comparison chart.

Sure! Here's a brief comparison chart:

1. Revenue Recognition: GAAP has specific guidelines, while IFRS is more principles-based.
2. Asset Measurement: GAAP often uses historical cost, whereas IFRS allows for revaluation.
3. Leases: GAAP classifies leases as operating or capital, while IFRS treats most leases similarly on the balance sheet.

Would you like to know more about a specific area?

Can you explain the revenue recognition differences?

Certainly! Under GAAP, revenue is recognized when it is earned and realizable, following specific criteria. IFRS, on the other hand, uses a principles-based approach, focusing on the transfer of control rather than just risks and rewards. This can lead to differences in timing and amount of revenue recognized.

Thanks! This is really helpful.