Accounting standards and guidelines such as GAAP and IFRS provide the framework for how accounting events and financial statements should be recorded and reported. GAAP sets the standards for US accounting while IFRS is used internationally. Some key differences between GAAP and IFRS include their usage - GAAP in the US vs IFRS in over 120 countries, as well as their definitions of certain accounting concepts like what constitutes an asset. Both aim to ensure transparency and consistency in financial reporting.

2. Accounting
Standards
Guideline of financial
accounting
In
accordance
to standard
s set by the
IASB*
Specify when
and how
accounting
events are to
be released
*International Accounting Standards Board
Relate to all aspects of an entity’s
finances including assets, liabilities,
revenue, expenditures and equity

3. Accounting Event
A transaction or change
recognized on the financial
statements of an accounting
entity
An External transaction
would occur with an
outside party, such as the
purchase or sales of a good.
An Internal transaction is
for adjustment in the
accounts of the financial
statements

4. Great Depression
Financial Accounting Foundation (FAF)-- as the nation’s
accounting standard-setting authority
AICPA and the New York Stock Exchange began to
revise the financial reporting requirements
20th
Century
Passage of the Securities Act of 1934 -- SEC to oversee
accounting and auditing methods
1930
1934
1972
1973 Creation of Financial Accounting Standards Board
(FASB)
Government Accounting Standards Board (GASB) was
formed under the FAF
1974

5. Generally Accepted Accounting
Principles (GAAP)

6. Stands for Generally Accepted Accounting Principles
They are the standard framework of guidelines for
financial accounting
Include the standards, conventions, and rules that
accountants follow in recording and summarizing and in the
preparation of financial statements
Many businesses choose to opt out of GAAP practices as
they operate on a cash basis, as opposed to an accrual basis
INTRODUCTION

7. Example:
Country GAAP
China Chinese Accounting Standards (Zhōngguó q yè kuàijì zh nzéǐ ǔ
中国企业会计准则 )
Canada Generally Accepted Accounting Principles
France Generally Accepted Accounting Practice (Plan Comptable
Général)
Germany Generally Accepted Accounting Practice (Grundsätze
ordnungsmäßiger Buchführung)
India Generally Accepted Accounting Practice
Russia Generally Accepted Accounting Practice (RAP)
United Kingdom Generally Accepted Accounting Practice
United States Generally Accepted Accounting Principles

8. US Generally Accepted accounting
principles (gaap)

9. Introduction
Adopted by the Securities and Exchange Commission (SEC)
Established by FASB
Represent objectives and guidelines for financial
statements and reporting calculations
3 rules covered in GAAP:
oBasic accounting principles and guidelines
oDetailed standards of the FASB and APB
oGenerally accepted industry practices

10. Useful in making rational investment, credit, and other
financial decisions
In assessing the amounts, timing, and uncertainty of
prospective cash receipts about economic resources, the
claims to those resources, and the changes in them
Make financial decisions
Make long-term decisions
Improve the performance of the business
Maintain records

12. GAAP
4 Assumptions
4 Principles 4 Constraints

13. Business Entity
Going
Concern
Monetary Unit
Periodicity
Assumptions

14. Historical Cost
Principle
Revenue
Recognition
Principle
Matching
Principle
Full Disclosure Principle
Principles

15. Objectivity
Principle
Materiality
Principle
Consistency
Principle
Conservatism
Principle
Constraints

16. International Financial Reporting
Standards (IFRS)

17. Introduction
Set of international accounting standards
Established in 2001
State how particular types of transactions and other
events should be reported in financial statements
Issued by the International Accounting Standards Board
(IASB)
Established to have a common accounting language, so
business and accounts can be understood from company to
company and country to country

18. Objective
Maintain stability and transparency throughout the financial world
Why use
IFRS?
Who follows
IFRS?
Save money on alternative comparison costs and individual investigations
Allow information to flow more freely
About 120 countries use IFRS in some way, and 90 of those require them and
fully conform to IFRS regulations

20. Std No. title deScriptioN
IFRS 1 First-time Adoption of IFRS
Sets out the procedures that an
entity must follow when it adopts
IFRSs for the first time
IFRS 2 Share-based payment
Requires an entity to recognize
share-based payment transactions
in its financial statements
IFRS 3 Business Combinations
Outlines the accounting when an
acquirer obtains control of a
business
IFRS 4 Insurance Contracts
Applies to all insurance contracts
that an entity issues and to
reinsurance contracts that it holds
IFRS 5
Non-current Assets held for Sale
and Discontinued Operations
Outlines how to account for non-
current assets held for sale
IFRS Reporting standards

21. Std No. title deScriptioN
IFRS 6
Exploration for and
Evaluation of Mineral
Resources
Has the effect of allowing entities adopting the
standard for the first time to use accounting
policies for exploration and evaluation assets that
were applied before adopting IFRSs
IFRS 7
Financial
Instruments:
Disclosures
Requires disclosure of information about the
significance of financial instruments to an entity,
and the nature and extent of risks arising from
those financial instruments, both in qualitative and
quantitative terms
IFRS 8 Operating Segments
Requires particular classes of entities to disclose
information about their operating segments,
products and services, the geographical areas in
which they operate, and their major customers
IFRS 9 Financial Instruments
Includes requirements for recognition and
measurement, impairment, de recognition and
general hedge accounting

22. Std No. title deScriptioN
IFRS 10
Consolidated
Financial Statements
Outlines the requirements for the preparation and
presentation of consolidated financial statements,
requiring entities to consolidate entities it controls
IFRS 11 Joint Arrangements Outlines the accounting by entities that jointly
control an arrangement
IFRS 12
Disclosure of
Interests in other
Entities
A consolidated disclosure standard requiring a
wide range of disclosures about an entity's
interests in subsidiaries, joint arrangements,
associates and unconsolidated structured entities
IFRS 13
Fair Value
Measurement
Applies to IFRSs that require or permit fair value
measurements or disclosures and provides a
single IFRS framework for measuring fair value
and requires disclosures about fair value
measurement

23. Std No. title deScriptioN
IFRS 14
Regulatory Deferral
Accounts
Permits an entity which is a first-time adopter of
International Financial Reporting Standards to
continue to account, with some limited changes,
for 'regulatory deferral account balances' in
accordance with its previous GAAP, both on initial
adoption of IFRS and in subsequent financial
statements
IFRS 15
Revenue from
Contracts with
Customers
Specifies how and when an IFRS reporter will
recognize revenue as well as requiring such
entities to provide users of financial statements
with more informative, relevant disclosures
IFRS 16 Leases Specifies how an IFRS reporter will recognize,
measure, present and disclose leases

24. Difference between IFRS and
GAAP

25. GAAp iFrS
Stands for
Generally Accepted
Accounting Principles
International Financial Reporting Standards
Introduction
Standard guidelines
and structure for
typical financial
accounting
Universal financial accounting method that
lets international businesses to understand
each other and work together
Used in United States
Around 120 countries, including the
European Union
Required documents in
financial statements
Balance sheet, income
statement, statement
of comprehensive
income, changes in
equity, cash flow
statement, footnotes
Balance sheet, income statement, changes
in equity, cash flow statement, footnotes
Definition of an asset
The U.S. GAAP
framework defines an
asset as a future
economic benefit
The IFRS framework defines an asset as a
resource from which future economic
benefit will flow to the company