20/03/2017
What are the key differences between IFRS and U.S. GAAP?
ANSWER WIKI
In general, IFRS is more "principle-based" and U.S. GAAP is more "rule-based". In particular:
Inventory Costs
LIFO (Last-In First-Out) method for accounting for inventory costs is allowed under U.S GAAP but not under IFRS.
Write-downs
Under U.S. GAAP, any reversal of write-downs (of inventory or long-lived assets) is not allowed. Under IFRS, write-downs can be reversed in future reporting periods if specific criteria are met.
U.S. GAAP requires a two-step test to determine whether an asset is impaired. Thus, it is easier to write down under IFRS.
Asset valuation
IFRS allows both historical cost model and revaluation model. U.S GAAP allows only historical cost model.
Revenue Recognition
IFRS guidance regarding revenue recognition is far less extensive than GAAP and contains relatively little industry-specific instruction or criteria.
Intangible assets
IFRS requires research cost be expensed but allows recognition of internal asset arising from development (or the development phrase of an internal project) if certain criteria are met. U.S. GAAP requires research and development costs be expensed, with some exceptions.
Debt Covenants
U.S. GAAP permits curing debt covenant violations after fiscal year end. IFRS requires curing debt covenant violations by fiscal year end.
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References:
What are some of the key differences between IFRS and U.S. GAAP?
Current Major Differences Between IFRS and US GAAP
