What are the major differences between US GAAP and IFRS in the reporting of assets and liabilities?

What are the major differences between US GAAP and IFRS in the reporting of assets and liabilities?

The primary difference between the two systems is that GAAP is rules-based and IFRS is principles-based. This disconnect manifests itself in specific details and interpretations. Basically, IFRS guidelines provide much less overall detail than GAAP.

Is pooling of interest method still allowed?

As already mentioned, FASB, the organization that establishes and interprets generally accepted accounting principles, abolished the use of the pooling of interests method in 2001. The accounting body ruled that all business combinations should be accounted for using the purchase price method.

Is pooling of interest method still allowed under IFRS?

Pooling of interest method, fresh start method, or other methods are not allowed by IFRS 3. However, they may be used in accounting for business combinations under common control (which are on the IASB’s agenda).

What is the difference between pooling of interest and purchase method?

In pooling of interest method, the assets and liabilities are recorded at their carrying amounts in the books of the transferee company, whereas in purchase method, the assets and liabilities of the acquired company are recorded in the books of acquiring company at their fair market value, as on the date of acquisition …

Is IFRS more accurate than GAAP?

The way IFRS reflects to gains and losses in a timely manner puts IFRS in a more reliable and credible position than the GAAP in terms of reporting standards.

Is purchase and pooling of interests accounting used in the US?

APB-16,SFAS-79& 109 While both purchase and pooling of interests accounting are used in the US, they are not alternatives. Pooling must be used if certain criteria are met.

What are the similarities between US GAAP and IFRS?

There are many similarities in US GAAP and IFRS guidance on financial statement presentation. Under both sets of standards, the components of a complete set of financial statements include a statement of financial position (balance sheet), a statement of profit or loss (income

What is the pooling of interests method?

The IFRS and GAAP do not allow the usage of this method anymore. Example: Company A acquired Company B. Therefore, using the pooling of interest method, the balance sheet of both the companies was added to derive the total value of the companies. This was called the pooling of interests method.

What replaced the pooling-of-interests method in accounting?

The pooling-of-interests method was replaced by the purchase accounting method, which itself was replaced by the current method, the purchase acquisition method. The pooling-of-interests method combined the assets and liabilities of both companies at book value.