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Comparing IFRS to GAAP Essay
Joshua Tracey
ACC /2291
March 22nd, 2016
Mr. Bob Wells

Comparing IFRS to GAAP Essay The past few weeks, the team and I have been discussing each of the questions and have come to some very good answers to each. We tried to compile a list so that each can put into our own words and input our opinions and examples that we have direct experiences with. Each question is outlined below and has a brief excerpt of each of our discussions.
IFRS 8-1: What are some steps taken by both the FASB and IASB to move to fair value measurement for financial instruments? In what ways have some of the approaches differed?
Under either system, companies will be required to report assets at either book value or fair value, depending on the situation. Fair value measurements provide users of financial statements with an accurate picture of the value of a company’s assets. Both IFRS and GAAP require firms to include information regarding fair value measurement practices in the notes of financial statements. As a general rule of thumb, all assets in the same class must receive the same valuation treatment. In regards to the value of receivables, IRFS uses a two-tiered method that first analyzes individual receivables, and then looks at receivables as a whole to determine if there is any impairment.
IFRS 9-1: What is component depreciation, and when must it be used?
Component depreciation happens when an asset has fundamentally different parts that should be depreciated with different treatment. Under IFRS, firms are required to use component depreciation if the parts of the asset offer varying patterns of benefit. The reasoning behind this is that it provides a clearing picture of the asset’s book value. This method is also permitted under GAAP, but US companies rarely use it in practice. One practical example of IFRS component…...

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