International Financial Reporting Standards (IFRS)

Generally Accepted Accounting Principles (U.S. GAAP)

US GAAP is the general accounting principles, standard, and procedures that the U.S. companies follow to prepare their financial statements. GAAP has combination of accepted standards that the companies should follow when recording and reporting their accounting information. For example, GAAP has set up the rules that companies should follow when preparing the financial data such as balance sheet, revenue recognition, and outstanding shares recognition.

GAAP also mandates the companies to have consistence, relevance, reliable, and comparable accounting standards. One of the main objectives for setting up GAAP is to assist the investors to have minimum level of consistency when analyzing the financial statement of a company.

The basic four accounting principles that GAAP lays down are as follows:

Historical Cost Principle: GAAP makes it mandatory for companies to consider the acquisition of costs.

Revenue Recognition Principle: This refers...
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