International Standards have been described as “principles-based” while U.S. GAAP is typically described as “rules-based.” Take...

International Standards have been described as “principles-based” while U.S. GAAP is typically described as “rules-based.” Take a look at the IFRS’ interpretation of “significant influence” and FASB’s definition-compare and contrast the two-how similar are they- where are the differences?

Feel free to browse through the FASB Codification for more details on this.

Expert Solution

International Accounting Standard 28 (IAS 28) Investment in Associates has been issued by the International Accounting Standards Board describes an associate as the entity on which an investor has significant influence. Significant influence as per the definition provided in the standard, i.e. IAS 28, is the ability to exercise significant control over the operating and financial decision making process of an organization or an investee. However that does not mean to control or jointly control the operations of the organisation or the investee.

FASB on the other hand makes it compulsory that there must be investment in a certain proportion of shares in an organization in order to establish existence of significant control. Thus, investor must have a certain percentage of shareholding in an organization to exercise significant control over the operating and financial decision making process of the investee.

Thus, from the above it is clear that though both IFRS and FASB have given equal importance of participation in the decision making process of the investee but whereas IFRS have highlighted the importance of actual existence of significant control FASB have focused on portion of shareholding in the investee. Thus, to prove the existence of significant control over the operations of an organization FASB mainly relies on the percentage of shareholding of the investor in the investee whereas this is not exactly the case in case IFRS.

ekkarill92 answered 1 year ago

comparing and contrasting rules-based (U.S. GAAP) versus principles-based accounting standards (International Financial Reporting Standards). also identify...

comparing and contrasting rules-based (U.S. GAAP) versus principles-based accounting standards (International Financial Reporting Standards). also identify where bright lines currently exist in the statement of financial position, and areas in which we might expect revisions in the future.

U.S. GAAP and International Financial Reporting Standards have largely similar guidance for accounting for business combinations....

U.S. GAAP and International Financial Reporting Standards have largely similar guidance for accounting for business combinations. Under IFRS, the guidance is established in IFRS 3R, Business Combinations. One topic on which U.S. and IFRS differ is with respect to reporting noncontrolling interest for noncontrolling interest in consolidated financial statements. Required Briefly, i.e. no more than 3 paragraphs, explain the difference between IFRS and U.S. GAAP regarding valuation of noncontrolling interest in a consolidated financial statement.

US generally accepted accounting principles(GAAP) is similiar but not identical to International Financial Reporting Standards (IFRS)....

US generally accepted accounting principles(GAAP) is similiar but not identical to International Financial Reporting Standards (IFRS). Please compare and contrast their financial accounting guidelines. Typed answer please.

Contrast rules-based versus principles-based accounting,

Identify any differences between U.S. GAAP and International Financial Reporting Standards in accounting for government grants received.

Describe the purpose of U.S. generally accepted accounting principles (U.S. GAAP) and the benefits that these...

Describe the purpose of U.S. generally accepted accounting principles (U.S. GAAP) and the benefits that these rules provide.

what happen to the reference, to this homework The U.S. GAAP standards in this image (and...

what happen to the reference, to this homework The U.S. GAAP standards in this image (and found in your book on page 80) were developed and codified by the Financial Accounting Standards Board (FASB) and accepted by the AICPA (American Institute of Certified Public Accountants). You have probably heard of the AMA (American Medical Association) for physicians. It is a professional organization that promotes and educates physicians. The professional organizations that developed GAAP (Generally Accepted Accounting Principles) are similar to...

For the facility described in !!!, you have been notified by the U.S. Department of Homeland...

For the facility described in !!!, you have been notified by the U.S. Department of Homeland Security that your facility is a “covered” facility in a high risk tier. List and briefly explain the actions you need to take to fully comply with CFATS? Please note, a complete response to this question requires listing each of the rules you need to review and a brief explanation of how you determined the appropriate actions you must take to keep the facility...

The old GAAP hierarchy is said to be a rules-based approach, and the new codification is...

The old GAAP hierarchy is said to be a rules-based approach, and the new codification is meant to move our standards to a principles-based approach. what is the interpretation of the distinction between these two philosophies?

The Financial Accounting Standards Board is the primary source of generally accepted accounting principles (GAAP) for...

The Financial Accounting Standards Board is the primary source of generally accepted accounting principles (GAAP) for all health care organizations. Do you agree with this statement? Why or why not?

Question