IASB Accounting Standards Flashcards
Identify the authoritative guidance for international accounting standards. Describe the standard-setting process for the International Accounting Standards Board (IASB). Identify major differences between U.S. GAAP and IFRS.
1
Q
Who makes IFRS?
A
IASB
2
Q
What are the differences between US GAAP and IFRS?
A
- U.S. GAAP employs a rules-based approach. IFRS is considered a principles-based approach.
- U.S. GAAP is precise and provides conservative guidance, whereas IFRS provides general qualitative guidance, so it equires more professional judgment.
- The IASB framework should apply to both public and private companies, but U.S GAAP apply to public companies, PCC sets standards for private companies.
- In IFRS, income includes revenue and gain. Expense includes expense and lose.
3
Q
IFRS assumptions
A
Accrual basis accounting/ Going concern
4
Q
What comprises income under the International Accounting Standards Board (IASB) framework?
A
Revenues and Gains
5
Q
IFRS for SMEs
A
- . IFRS for SMEs does not permit the use of LIFO cost flow in valuing inventories.
- . IFRS for SMEs may be used using OCBOA besides accrual basis.
- Under IFRS for SMEs, both the cost and equity method may be used by an investor . Under U.S. GAAP, the cost method may not be used; the equity method is required.
