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On the Radar

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

August 2023
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On the Radar
Comparing IFRS Accounting Standards and U.S. GAAP: Bridging the Differences

Although U.S. GAAP and IFRS® Accounting 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 Accounting 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 Accounting Standards (and vice versa).
  • U.S. entities acquire entities that report under IFRS Accounting Standards (and vice versa).
  • U.S. entities consolidate subsidiaries or other foreign operations that report under IFRS Accounting 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 Accounting Standards (and vice versa).
  • Entities transition from IFRS Accounting Standards to U.S. GAAP (or vice versa).
  • Practitioners seek to compare financial statement information prepared under U.S. GAAP and IFRS Accounting Standards.