IFRS & GAAP Differences – A Summary 2
One key topic of CMA Part 1 is the differences between the IFRS and GAAP accounting standards. According to the CMA LOS:
Candidates should be aware of the major differences in reported financial results when using GAAP vs. IFRS and the impact on analysis.
Today’s blog will provide you a summarized list for the areas for which we will be discussing the differences between the GAAP and IFRS. A previous blog article talks about the similarities (IFRS & GAAP Differences – A Summary 1) . You will find this to be an excellent tool to use for a quick revision before the exam day.
Primary Areas where Differences Between IFRS and U.S. GAAP Exist:
- Inventories (costing methods, valuation and write-downs (e.g., LIFO)),
- Revenue Recognition (sale goods/services,deferred receipts&construction contract),
- Expense Recognition (share-based payments and employee benefits),
- Intangible Assets (development costs and revaluation),
- Leases (leases of land and buildings),
- Long-lived Assets (revaluation, depreciation, and capitalization of borrowing costs),
- Impairment of Assets (determination, calculation and reversal of loss), and
- Financial Statement Presentation (extraordinary assets and changes in equity).
Main Differences Between the GAAP and IFRS in Specific Areas:
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