Wednesday, June 29, 2022

Difference between IFRS and USGAAP

The primary difference between the two systems is that GAAP is rules-based and IFRS is principles-based.

No.CategoryIFRSUSGAAP
1AdoptionGlobally adoptedExclusively used within the United States.
2MethodologyPrinciple BasedRule based
3Inventorythe LIFO method for inventory is not allowed.LIFO method is allowed
4Reversal of ImpairmentAllowed to certain extentNo reversal allowed  
5Depreciation calculation for Right of Use assetsDepreciation calculated using SLM methodDepreciation is the difference between lease payment minus ROU interest cost.
6Development costCapitalized under IFRSNot allowed to be capitalized
7Fair value RevaluationRevaluation of the following assets to fair value if fair value can be measured reliably: inventories, property, plant & equipment, intangible assets, and investments in marketable securities. This revaluation may be either an increase or a decrease to the asset’s value.Revaluation is prohibited except for marketable securities
CA Divya Thakkarhttps://www.financeshadow.com
Chartered accountant | IIM Bangalore 7+years of experience in Consultancy, Investment Banking, Ecommerce & IT Industry. Expert in IFRS, USGAAP, INDAS & US Regulatory requirement. Currently working with Deloitte Touche & Company in Risk ,Finance & Control advisory. Worked in Companies like Barclays Bank, HCL Technologies Ltd & BazaarCart.

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