IFRS and GAAP

Who sets the standards for IFRS?

The International Accounting Standards Board (IASB), an independent international organization, is responsible for setting and maintaining IFRS.

Is IFRS more suitable for certain industries?

IFRS aims to be applicable across industries, but certain industries may have specific guidance within the standards.

What is the role of the FASB in GAAP?

The Financial Accounting Standards Board (FASB) is an independent, private-sector organization that sets accounting standards in the U.S. It operates under the oversight of the Financial Accounting Foundation (FAF).

Are there specific GAAP standards for different industries?

GAAP provides industry-specific guidance for certain transactions and industries. For example, there are specific standards for banks, insurance companies, and not-for-profit organizations.

Can a company use both IFRS and GAAP?

While companies generally choose to use either IFRS or GAAP for their financial reporting, some multinational companies may need to reconcile financial statements using both sets of standards for different reporting purposes.

IFRS (International Financial Reporting Standards) and GAAP (Generally Accepted Accounting Principles) are two different sets of accounting standards used globally. IFRS improves transparency, and consistency in financial reporting around the world making it simpler and easier for the investor to compare financial statements from different countries; whereas, GAAP are the rules and guidelines that companies follow to make their financial statements. GAAP makes sure that all companies report their financial info in the same way so that it’s easier to compare them.