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Essay / Research Paper Abstract
This 3-page paper discusses differences between IFRS and FASB, as well as cash accounting vs. accrual accounting methods. Bibliography lists 1 source.
Page Count:
3 pages (~225 words per page)
File: AS43_MTdiffacct.rtf
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Unformatted sample text from the term paper:
in this question, well have to focus on a more general discussion, indicating that, for example, a service-oriented company isnt likely going to have inventory in the way of assets
as might, say a manufacturing company would. Furthermore, the service company may put more "asset value" into the area of "goodwill" (i.e., intangibles such as trademarks, logos and reputation) than
might its manufacturing counterpart, which has more tangible items to value. However, we can focus on some differences between International Accounting Standards Board
(IASB) and Financial Accounting Standards Boards (FASB) presentations. Due to the rise of globalization and the number of multinational companies doing business, these two organizations decided, some years ago, on
"convergence," a standardization that would allow MNCs more uniformity in financial reporting across countries. Convergence has its challenges, however, one of which
is that FASB and its US GAAP requirements follows rules-based accounting, where as IFRS is more principles-based. Rules-based accounting requires adherence to rules 100%, with little, if any, room for
flexibility or judgment as to recording or reporting. Principles-based accounting, on the other hand, has less specific guidance, and focuses more on the spirit, or intent of the standard, allowing
for judgment calls, if and when necessary. A difference in these rules can have an impact on things such as fair-market value, mark-to-market reporting or employee stock options. ESOs, for
example, are considered expenses under IASB standards, whereas they are not under FASB rules. Another question weve been asked to tackle is how
cash basis and accrual basis differ. This is an issue about when revenues and expenses are recognized. Under the accrual basis accounting,
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