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On the Radar

Comparing IFRS Standards and U.S. GAAP: Bridging the Differences

October 2021
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On the Radar
Comparing IFRS Standards and U.S. GAAP: Bridging the Differences

Although U.S. GAAP and IFRS® Standards are built on largely similar concepts and often lead to similar accounting outcomes, there are many differences in the specific accounting requirements. Therefore, it can be difficult to directly compare financial statements that have been prepared under these different standards. Accordingly, professionals need to be mindful of the differences between U.S. GAAP and IFRS Standards when preparing, aggregating, consolidating, comparing, or interpreting financial information that involves both sets of accounting standards. For example, knowledge of such differences may be important when:
  • U.S. entities negotiate transaction terms with entities that report under IFRS Standards (and vice versa).
  • U.S. entities acquire entities that report under IFRS Standards (and vice versa).
  • U.S. entities consolidate subsidiaries or other foreign operations that report under IFRS Standards (and vice versa).
  • U.S. entities raise capital in foreign markets (or vice versa).
  • U.S. entities provide financial statement information to a parent entity or other investors that report under IFRS Standards (and vice versa).
  • Entities transition from IFRS Standards to U.S. GAAP (or vice versa).
  • Practitioners seek to compare financial statement information prepared under U.S. GAAP and IFRS Standards.