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(a) Does U.S. GAAP require that companies disclose their accounting policies? Explain. (b) Does IFRS require...

(a) Does U.S. GAAP require that companies disclose their accounting policies? Explain. (b) Does IFRS require that companies disclose their accounting policies? Explain.

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Answer #1

a)It is required by the US GAAP for companies to provide disclosure of their significant accounting policies. The footnotes related to accounting policies describe the various accounting policies used for the financial statements balances. Disclosures relating to the accounting policy choices like inventory valuation,method of depreciation etc and other areas of company.

b)IFRS also requires the companies to disclose their accounting policies just like US GAAP but it also requires an additional information about the estimates and assumptions that have been made while arriving at the balances in financial statements. It also requires the companies to provide for how their judgements regarding the appropriate treatments for the amounts have been arrived at.

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