IFRS GAAP exam 1 questions & answers 2024/2025
similarities between GAAP and IFRS ch 1 - ANSWERS• The basic techniques for recording business transactions are the same for U.S. and international companies.
• Both international and U.S. accounting standards emphasize transparency in fina...
similarities between GAAP and IFRS ch 1 - ANSWERS• The basic techniques for recording business
transactions are the same for U.S. and international companies.
• Both international and U.S. accounting standards emphasize transparency in financial reporting. Both
sets of standards are primarily driven by meeting the needs of investors and creditors.
• The three most common forms of business organizations, proprietorships, partnerships, and
corporations, are also found in countries that use international accounting standards.
differences between GAAP and IFRS ch 1 - ANSWERS• International standards are referred to as
International Financial Reporting Standards (IFRS), developed by the International Accounting Standards
Board. Accounting standards in the United States are referred to as generally accepted accounting
principles (GAAP) and are developed by the Financial Accounting Standards Board.
• IFRS tends to be simpler in its accounting and disclosure requirements; some people say it is more
"principles-based." GAAP is more detailed; some people say it is more "rules-based."
• The internal control standards applicable to Sarbanes-Oxley (SOX) apply only to large public companies
listed on U.S. exchanges. There is continuing debate as to whether non-U.S. companies should have to
comply with this extra layer of regulation.
historical cost principle, fair value principle, and full disclosure principle - ANSWERSGAAP
Similarities between IFRS and GAAP chapter 2 - ANSWERSIFRS generally requires a classified statement
of financial position similar to the classified balance sheet under GAAP.
IFRS follows the same guidelines as this textbook for distinguishing between current and noncurrent
assets and liabilities.
, Differences between GAAP and IFRS ch 2 - ANSWERSIFRS recommends but does not require the use of
the title "statement of financial position" rather than balance sheet.
The format of statement of financial position information is often presented differently under IFRS.
Although no specific format is required, many companies that follow IFRS present statement of financial
position information in this order:
-Non‐current assets
-Current assets
-Equity
-Non‐current liabilities
-Current liabilities
Under IFRS, current assets are usually listed in the reverse order of liquidity. For example, under GAAP
cash is listed first, but under IFRS it is listed last.
IFRS has many differences in terminology from what are shown in your textbook. For example, in the
sample statement of financial position illustrated on the next page, notice in the investment category
that stock is called shares.
under IFRS, land is reported as - ANSWERSlong term investment
order of financial statements on balance sheet IFRS - ANSWERSnon ‐current assets, current assets,
equity, non‐current liabilities, current liabilities.
Similarities between IFRS and GAAP chapter 3 - ANSWERSTransaction analysis is the same under IFRS
and GAAP.
Both the IASB and the FASB go beyond the basic definitions provided in the textbook for the key
elements of financial statements, that is assets, liabilities, equity, revenues, and expenses.
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