What Is The Difference Between IFRS And GAAP?

In this column, our anonymous accountant (let's call him Jerry) has requested help with the question...

"What is the difference between IFRS and GAAP?"

This has been one of the many debatable topics in the accounting industry for both students, newbies and professionals alike. 

Here's the full gist about the dreaded IFRS vs GAAP as kept in the Diary of a Sexy Accountant!

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Jerry recently received an invite for an interview as a Junior Accountant; an entry-level position in a medium-sized organisation. The role would include posting journal entries, updating financial statements, maintaining accounts payables and account receivables, paying monthly payroll, and preparing financial reports.

Again, the successful staff would function as a  support staff to the larger finance team and be supervised by a senior accountant. 

At the interview, Jerry believes he can attempt to present his knowledge of GAAP vs. IFRS: What's the Difference? (without hopefully giving away his inability to give a broad view of the topic).

To kick this off... he starts by plainly answering the following questions.

What does GAAP stand for?

GAAP means Generally Accepted Accounting Principles.

What does IFRS stand for?

The acronym IFRS stands for International Financial Reporting Standard.

Lol...😄! Truly sexy of him to do so.

Jerry knows somehow that IFRS has gained significant importance, as many countries all over the world are adopting it as the standard for accounting (knowledge derived by studying for exams). He wonders what his interviewer hopes to gain by asking him the major differences between GAAP and IFRS!

Jerry and many others could use your help to improve their knowledge on accounting topics of concern. He has decided to Ask An Accountant.

Please share comments on the above Q & A below.