What is the Difference Between GAAP and IFRS?

The main differences between GAAP (Generally Accepted Accounting Principles) and IFRS (International Financial Reporting Standards) include:

1. Approach: GAAP is rules-based and more detailed, while IFRS is principles-based and allows for more interpretation and flexibility.
2. Enforcement: GAAP is enforced in the United States, while IFRS is not enforced worldwide, although it is recommended.
3. Inventory Costs: GAAP allows for both Last-In, First-Out (LIFO) and First-In, First-Out (FIFO) methods of accounting for inventory costs, while IFRS only permits the FIFO method.
4. Revenue Recognition: Both GAAP and IFRS have guidelines for recognizing revenue, but their specific rules and definitions may differ.
5. Investment Property: GAAP has no separate category for investment property, while IFRS does, allowing for revaluation to market value.
6. Lease Accounting: Both GAAP and IFRS have common frameworks for lease accounting, but there are differences in certain areas, such as the de minimus exception in IFRS.
7. Balance Sheet: The format of the balance sheet differs between GAAP and IFRS, with GAAP calling for accounts to be listed in descending order of liquidity and IFRS listing non-current assets first.

These differences can impact the way financial statements are prepared, presented, and interpreted by stakeholders. It is essential for businesses, investors, and financial professionals to be aware of these differences, especially when dealing with international operations.

Comparative Table: GAAP vs IFRS

The search results provided do not contain information about the differences between GAAP and IFRS. However, I can provide a brief overview of the differences between these two accounting standards:

GAAP (Generally Accepted Accounting Principles) and IFRS (International Financial Reporting Standards) are both sets of rules and guidelines that govern how financial statements are prepared and presented. Here are some key differences between the two:

Please note that this is a high-level overview, and there are many more differences between GAAP and IFRS. For example, there are specific differences in accounting treatments for items such as revenue recognition, financial instruments, leases, and goodwill impairment, among others.