The document discusses the shift from U.S. GAAP accounting standards to IFRS (International Financial Reporting Standards). IFRS are global accounting guidelines used by public companies to prepare financial statements. Adopting IFRS presents challenges for companies in collecting new information and ensuring controls are in place. However, there are also benefits such as easier financial statement preparation and comparability between international companies. Key differences between GAAP and IFRS include retrospective application requirements and the components of financial statements.

1. General Accounting
U.S. GAAP to IGAAP:
The Shift to IFRS

2. What is IFRS?
2
• International Financial Reporting
Standards
• A set of guidelines in accounting that is
used globally by public companies in
making their financial statements
• Can help better the almost obsolete
U.S. financial reporting system
• Let issuers demonstrate thoroughly the
economic undertakings that are
exclusive on their industry

3. Challenges with
the Shift
3
• Challenges involve accessing the correct
and relevant information, handling
numerous frameworks and
comprehending the accounting impact
• Entities that will adhere to IFRS will
surely be in a position wherein they have
to collect information and data using
new methods and techniques

4. Challenges with
the Shift
4
• Management has to strengthen and
keep a firm control of all other legal
obligations pertinent to the group
• U.S. firms have to carry out controls to
guarantee that the international
financial reporting guidelines are being
followed

5. Merits and
Demerits
5
• Merits
• Certified Public Accountants (CPAs) need
not to conform GAAP with IFRS
• Corporations can fend off the
transformation of IFRS financial
statements to GAAP for its foreign
bureaus
• Could demonstrate favorable accounting,
non-financial disclosures and corporate
governance

6. Merits and
Demerits
6
• Merits
• New standards would demonstrate a
clearer and more detailed picture of the
entity’s total accomplishment
• IFRS will provide a longer discussion
boardroom that will promote adequate
and competent decisions from the
corporate executives
• IFRS will ensure comparability and
aggressiveness with rival international
companies

7. Merits and
Demerits
7
• Demerits
• Shift to IFRS will cause resistance and tax
complications
• IFRS will exclude LIFO as a technique in
valuing inventory
• Entities will have to utilize different
methods that can result to higher tax
obligations
• May cause greater divergence between
bookkeeping based on tax accounting for
public companies

8. IFRS versus
GAAP
8
• Accounting framework
- U.S. GAAP demands retrospective
applications
- Companies need not to demonstrate
conformities on equities, losses or profits
- IFRS requires an absolute retrospective
application starting on the reporting date
for the company’s first IFRS financial
statement

9. IFRS versus
GAAP
9
• Financial statement
- In U.S. GAAP, components are similar to
IFRS financial statement except that three
years are needed for SEC registrants on all
statements but the balance sheet
- IFRS financial statement consists of two
years’ income statements, balance sheets,
cash flow statement, changes in equity
and accounting policies and notes

10. Good fortune is what
happens when
opportunity meets with
planning.
- Thomas Alva Edison
10
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For more information about The Shift to IFRS, please visit: http://bit.ly/BKMSH-GAAP-to-IGAAP