Question

What is the biggest difference between IFRS & US GAAP?

1) IFRS provides less detailed guidelines

2)US GAAP provides less detailed guidelines

3)IFRS provides more industry specific intstruction

4) None

Under US GAAP reversal of impairments are prohibited

1) True

2) False

Answer 1

Ans: 1)IFRS provides less detailed guidelines

Since IFRS is more principle based and is used by around 110 countries in the world, it requires judgement and intrepretation to be applied in a given situation.

However US GAAP is rule based and specific to the US therefore has more industry specific rules and guidelines to be followed.

Ans1) True

Under both when the market value of an asset declines the recognituon of impairment losses on long live assets is allowed. However when the market value later increases IFRS allows for the reversal of the impairment loss except Goodwill but US GAAP does not allow for the same.