A roadmap to comparing IFRS Standards and U.S. GAAP: Bridging the differences has been saved
A roadmap to comparing IFRS Standards and U.S. GAAP: Bridging the differences
This publication explores some of the key differences between IFRS® Standards and U.S. GAAP that are effective as of January 1, 2021, for public business entities with a calendar-year annual reporting period. Although this Roadmap does not capture all the differences that exist between the two sets of standards, it focuses on differences that are commonly found in practice.
We are pleased to present A Roadmap to Comparing IFRS Standards and U.S. GAAP: Bridging the Differences, which explores some of the key differences between IFRS® Standards and U.S. GAAP effective as of January 1, 2021, for public business entities that have a calendar-year annual reporting period. Over the years, these differences have decreased for some topics but have increased for others.
In 2002, the International Accounting Standards Board (IASB®) and the FASB issued a Memorandum of Understanding, which set out priorities and milestones to be achieved on major joint projects. The two boards worked together to improve their standards and seek convergence; however, the results have been mixed with respect to the latter. Although we have seen significant convergence in topics such as business combinations and revenue recognition, key differences have increased in topics such as financial instruments and the subsequent measurement of leases. For now, the remaining projects under the Memorandum of Understanding have been deferred, and there are no current projects on which the boards are working together toward converged solutions.
An understanding of the differences between U.S. GAAP and IFRS Standards may be relevant for:
- U.S. entities that consolidate subsidiaries or other foreign operations that report under IFRS Standards (or foreign subsidiaries that report under IFRS Standards and provide financial statement information to a parent entity that reports under U.S. GAAP).
- U.S. entities that provide financial statement information to a parent entity that reports under IFRS Standards (or foreign entities that report under IFRS Standards and consolidate subsidiaries or other operations that report under U.S. GAAP).
- U.S. entities that negotiate transaction terms with entities that report under IFRS Standards (and vice versa).
- Investors and other users of financial statements that seek to compare financial statements prepared under U.S. GAAP and IFRS Standards.
- Standard setters and others that consider opportunities to converge accounting requirements.
- Parties that participate in discussions on or seek to influence the development of new accounting requirements under U.S. GAAP or IFRS Standards.
This Roadmap does not attempt to capture all the differences that exist between the two sets of standards or that may be material to a particular entity’s financial statements. Our focus is on differences that are commonly found in practice. The significance of these differences—and others not included in this publication—to a given entity will vary depending on such factors as the nature of its operations, the industry in which it operates, and the accounting policy choices it has made. Reference to the underlying accounting standards and any relevant national regulations is essential to understanding the specific differences.
Subscribe and Archives
The Roadmap series contains comprehensive, easy-to-understand accounting guides on selected topics of broad interest to the financial reporting community.