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Understanding IFRS and US GAAP
On the Radar: Comparing IFRS accounting standards and US GAAP: Bridging the differences
US GAAP and IFRS Accounting standards share many similarities. However, there are important differences to be aware of when GAAP-using entities are consolidating, reporting to, or negotiating with IFRS-using entities. This roadmap provides a comparison of IFRS and US GAAP—two of the most widely used accounting standards in the world—and the most significant ways they diverge.
IFRS and US GAAP: Learn the differences
Although US 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 US 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:
- US entities negotiate transaction terms with entities that report under IFRS Accounting standards (and vice versa).
- US entities acquire entities that report under IFRS Accounting standards (and vice versa).
- US entities consolidate subsidiaries or other foreign operations that report under IFRS Accounting standards (and vice versa).
- US entities raise capital in foreign markets (or vice versa).
- US 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 US GAAP (or vice versa).
- Practitioners seek to compare financial statement information prepared under US GAAP and IFRS Accounting standards.
Navigating the divide
Continue your IFRS Accounting standards and US GAAP learning
Deloitte’s Roadmap Comparing IFRS Accounting standards and US GAAP: Bridging the differences provides an overview of key differences between IFRS Accounting standards and US GAAP. Entities should also consider other Deloitte roadmaps, which contain more detailed descriptions of the differences between the two standards on specific financial reporting topics.