GAAP vs. IFRS

Recently, there has been a lot of discussion on the process of changing the U.S. financial reporting system over from Generally Accepted Accounting Principles (GAAP) to International Financial Reporting Standards (IFRS). IFRS is becoming the global standard of reporting for public companies.

The major differences between GAAP and IFRS are the following:

1) Methodologies for impairment of PP&E, intangibles

2) Revaluation accounting

3) Recovery of impairments under IFRS

4) Recognition and measurement of provisions (including restructurings)

5) More detailed disclosures under IFRS

As for the timeline to when U.S. public companies will be converting to IFRS - it is still not set in stone. It is anticipated that 2015 will be the year for required use of IFRS, but this is tentative and will be determined by the SEC in 2011.

Sources: http://www.swensonadvisors.com/assets/MajorDifferencesBetweenUSGAAPandIFRS.pdf

http://www.journalofaccountancy.com/Web/20102656.htm

http://www.rehmann.com/default.cfm?t=service_industry.cfm&L2=ASSURA&L3=IFRSAS

http://accounting.aqimg.com/2010/04/ifrs-and-gaap-difference/