Advances in Economics, Management and Political Sciences
- The Open Access Proceedings Series for Conferences
Proceedings of the 3rd International Conference on Business and Policy Studies
Series Vol. 71 , 18 January 2024
Open
Access | Article
Major Changes in IFRS and Comparison with US GAAP
* Author to whom correspondence should be addressed.
Abstract
The evolution of International Financial Reporting Standards (IFRS) reflects the needs of the global business environment and the pursuit of higher quality financial reporting. This paper discusses and explores major changes implemented in IFRS, specifically in the areas of revenue recognition, lease accounting, and the treatment of intangible assets. The shortcomings of the past application of IFRS standards in these aspects are presented in this paper, as well as changes and benefits after IFRS made corresponding modifications. By reviewing materials and literature, the study conducts a comparison between IFRS and the United States Generally Accepted Accounting Principles (US GAAP). These two major accounting frameworks have adopted unique methods and standards. Still, both the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) work hard together to realize international harmonization. The outcomes of this research make it clear that ongoing refinements to IFRS have significantly improved the clarity, consistency, and comparability in how financial activities are reported. Such changes have been pivotal in diminishing uncertainties and bolstering the trustworthiness of financial disclosures. Being influenced by the continuous developments in IFRS, greater transparency and accountability in financial reporting will be achieved. This has made a great contribution to helping investors in sound economic decision-making and enhancing investor confidence.
Keywords
Accounting Principles, Revenue Recognition, Lease, Intangibles
References
1. Mangu, G., Soare, G. J., & Emanuel, C. C. (2023). The Ifrs' Impact on Financial Reporting as well as the Asymmetry of Financial and Accounting Information. Acta Universitatis Danubius. Oeconomica, 19(1), 111-129.
2. Fajardo, C. L., 2016. Convergence of Accounting Standards World Wide - An Update. Journal of Applied Business and Economics, 18(6), 148 – 160.
3. Daske, H., Hail, L., Leuz, C., & Verdi, R. (2008). Mandatory IFRS reporting around the world: Early evidence on the economic consequences. Journal of Accounting Research, 46(5), 1085-1142.
4. Nobes, C. (2013). The continued survival of international differences under IFRS. Accounting and Business Research, 43(2), 83-111.
5. Baker, C. Richard & Barbu, Elena M. (2007). Trends in research on international accounting harmonization," The International Journal of Accounting, Elsevier, 42(3), 272-304.
6. Barone, E., Birt, J., & Moya, S. (2014). Lease Accounting: A Review of Recent Literature. Accounting in Europe, 11(1), 35-54.
7. Morales-Díaz, J., & Zamora-Ramírez, C. (2018). Effects of IFRS 16 on Key Financial Ratios: A New Methodological Approach. Accounting in Europe, 15(1), 1-33.
8. Nichita, M. (2019). Intangible Assets – Insights From a Literature Review. Accounting and Management Information Systems, 18(2), 224-261.
9. Li, B., Siciliano, G., & Venkatachalam, M. (2020). Economic Consequences of IFRS Adoption: The Role of Changes in Disclosure Quality. Contemporary Accounting Research. Advance online publication.
10. GUILLAUME, O., & PIERRE, D., 2016. The Convergence of U.S. GAAP with IFRS: A Comparative Analysis of Principles-based and Rules-based Accounting Standards. Scholedge International Journal of Business Policy & Governance, 3(5), 63-72.
11. United States Securities and Exchange Commission. Office of the Chief Accountant. (2011). Work plan for the consideration of incorporating International Financial Reporting Standards into the financial reporting system for U.S. issuers: A comparison of U.S. GAAP and IFRS. https://www.sec.gov/spotlight/globalaccountingstandards/ifrs-work-plan-paper-111611-gaap.pdf 11
12. Holovina, D., Karpenko, O., & Plikus, I. (2022). International Convergence of Financial Reporting. Social Economics, (63), 83-93.
13. Kallousa, Najlaa and Warsame, Hussein A. (2018). Examining Often-Heard Allegations: Is U.S. GAAP More Rules-based than IFRS? Social Science Research Network.
Data Availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License. Authors who publish this series agree to the following terms:
1. Authors retain copyright and grant the series right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this series.
2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the series's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this series.
3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See Open Access Instruction).
- Volume Title
- Proceedings of the 3rd International Conference on Business and Policy Studies
- ISBN (Print)
- 978-1-83558-281-7
- ISBN (Online)
- 978-1-83558-282-4
- Published Date
- 18 January 2024
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/71/20241439
- Copyright
- 18 January 2024
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited