GAAP & IFRS

Difference between US GAAP and the IFRS

Difference between US GAAP and the IFRS

Introduction

Accounting for investment companies is a change between worlds: they operate globally, but parent and subsidiary must be accounted for locally. This discussion will attempt to highlight the characteristics that are similar between the GAAP and the IFRS. Repeatedly with similarities and differences between accounting under International Financial Reporting Standards (IFRS), U.S. Generally Accepted Accounting Principles (U.S. GAAP) and local GAAP PwC's brochure Similarities & Differences: A comparison of U.S. GAAP and IFRS for investment companies lays particular emphasis on the relevant rules for investment funds. Other changes to be, because as the target for the publication of many new, jointly developed reporting standards to the IASB and FASB have plugged the middle of 2011.

Discussion

The advantages of Swiss GAAP ARR and IFRS are mainly in the disadvantages of IFRS. For all users of IFRS is the effort to understand the changes, identify potential implications of accounting and early after introducing enormous (McEwen, 2009). On the one hand, there are large legal entities with a well-developed financial apparatus, on the other hand, very small units in which the financial statements are made by financial people who are generalists rather than specialists accounting (Bellandi, 2012). These structural adjustments of accounting standards are challenging and time consuming to ensure the perfect quality implementation.

Frequent adjustments of standards also reduce comparability with previous financial years, making it difficult for stakeholders to make multi-year comparisons (Walton, 2009). Especially regarding the upcoming changes in IFRS as (IAS 17) Leasing and Revenue Recognition (IAS 11) were large for coverage of organizations influence would increase the administrative burden on and we believe that the transparency for the reader of the financial statements rather negative positive influence (Wiecek & Young, 2010).

One drawback is, of course, the change from Main to the Domestic Standard of the Six Swiss Exchange (Bellandi, 2012). Because of our shareholder, this disadvantage is, however, rather less important. This internal communication and knowledge transfer is more in demand than under IFRS. The IFRS Foundation is aimed at IFRS for SMEs (IFRS for Small and Medium Enterprises) to small and medium-sized companies. It is a kind of stripped-down version of the IFRS standards (McEwen, 2009).

The determination of the functional currency is necessary for the application of the calculation method and the recording of the conversion difference (Walton, 2009). The determination of the functional currency is dependent on six criteria: cash flow, sales prices, the markets, the issues, the financing and the business relationships in the group. You can then enter the two main cases are divided (Wiecek & Young, 2010). A subsidiary acts independently in a foreign market with low intra-group transactions as the functional currency of the subsidiary. The conversion uses the modified closing rate method is used. Here are the assets and liabilities at the closing rate, while equity is translated at historical rates and income and expenses at the average exchange rate (Bellandi, ...