Gaap Essays

  • Difference Between GAAP And IFRS

    1016 Words  | 5 Pages

    Difference between GAAP and IFRS The GAAP and the IFRS are the two accounting standards that are used by businesses. The IFRS is used in over 120 countries, especially countries in the European Union while the GAAP is used primarily in the United States. Although the two standards serve the same purpose, there are some differences in the way they operate. The most outstanding difference between the two is that while the GAAP is based on rules, the IFRS is based on principles. Unlike a rule based

  • Generally Accepted Accounting Principles (GAAP)

    1343 Words  | 6 Pages

    1. Explain Generally accepted accounting principles (GAAP)? Generally accepted accounting principles (GAAP) are the standard framework of guidelines for financial accounting used in any given jurisdiction; generally known as accounting standards or standard accounting practice. The following is a list of the ten main accounting principles and guidelines together with a highly condensed explanation of each. a. Economic Entity Assumption The economic entity principle states that the recorded activities

  • GAAP Principles: Generally Accepted Accounting Practice

    1811 Words  | 8 Pages

    Elaborate GAAP Principles with suitable examples.  GAAP GAAP stands for Generally Accepted Accounting Practice. It is a common set of accounting principles, standards and procedures that companies must follow when they compile their financial statements. GAAP is a combination of authoritative standards issued by Financial Accounting Standards Board and the commonly accepted way of recording and reporting accounting information. GAAP improves the clarity of the communication of financial information

  • Comparing IFRS To GAAP: International Financial Reporting Standards

    869 Words  | 4 Pages

    Comparing IFRS to GAAP IFRS stands for International Financial Reporting Standards and is a set of accounting standards developed by and independent, not for Profit organization called the International Accounting Board. GAAP are the standard framework of guidelines for financial accounting used in any given area or jurisdiction. They are known as standard accounting practices. I will touch on some of the areas where these are similar and different to help define each. The given information will

  • Summary: Key Performance Indicators

    910 Words  | 4 Pages

    The purpose of using statistical and GAAP financial KPIs is to set up an overall understanding of the organisation’s performance while using non-GAAP financial KPIs that will give a more in-depth sight into the business. For instance, Net Yield is commonly used in the cruise industry to measure a cruise corporate revenue performance and for revenue

  • Inventory Valuation Analysis

    1594 Words  | 7 Pages

    amounts being reported on the balance sheet and income statement. These differences will have impacts on cross country merger or acquisition and cross-border company comparison. I have chosen the inventory valuation applied under UK (IFRS) and US (US GAAP) as different valuation method applied to inventories could lead to enhance comparability between countries. Also it will have impact on the reported income

  • Case Study: Stanley Black & Decker Inc.

    1401 Words  | 6 Pages

    financial statement are not following the GAAP -Adverse opinions when the financial statements are not fairly presented according to GAAP -Disclaimer of opinion: when they are not able to determine an opinion due to a very significant switch in the way of preparing the financial statement without any consideration to GAAP ……………………………………………………. Question: 2 The

  • Pro Forma Advantages

    552 Words  | 3 Pages

    Traditionally, pro forma earnings are lampooned as “earnings before the bad stuff”, which are lower than the figure according the GAAP. Companies may present to the public their earnings and results of operations on the basis of methodologies other than GAAP. And this presentation in the earnings release is often referred to as “pro forma” financial information. Many companies were thought to be using pro forma figures not only to exclude one-time charges, but also to strip put recurrent costs and

  • Ethical Issues In Accounting

    1710 Words  | 7 Pages

    This is important because investors rely on these statements to make their investment decisions. GAAP aids in the preparation of statements that reflect the economic reality making the financial statements comparable and easy to understand. For financial information to be useful to the users, GAAP requires the used information to be consistent, reliable, relevant and comparable. Implementation of GAAP is done through disclosure and measurement principles (Bampton and Cowton, 2013, p.557). Disclosure

  • Should Accounting Standards Be Rule-Based Or Principle Based

    1046 Words  | 5 Pages

    Introduction The standards for financial reporting are designed for corporation with global business matters in order to understand and compare the global business needs. These are the rules to be followed by worldwide accountants to maintain books of financial records. In the world of business it is called international financial reporting standards. The debate has been going throughout the last fifty years on whether accounting standards should be rules –based or principle based (Zeff, 2003).

  • Case Study: Medicis Pharmaceutical Company

    1025 Words  | 5 Pages

    Analyze the primary accounting issues which form the crux of the litigation or fine for the firm, and indicate the impact to the firm as a result of litigation or fine. Provide support for your rationale. Ernst & Young LLP agreed to pay a record $2M fine for failing to fully evaluate three annual audits (during 2005-2007) of Medicis Pharmaceutical Corp’s financial statements. The PCAOB stated that E&Y along with its partners did not properly evaluate Medicis sales returns reserve and “accepted the

  • Enron Accounting Scandal Analysis

    843 Words  | 4 Pages

    useful in decision-making, it must incorporate the qualitative characteristics of relevance, reliability, comparability and understandability through the employment of the Generally Accepted Accounting Principles (GAAP). However in certain instances, entities don’t conform to the GAAP and fraudulently manipulate their financial reports

  • Business Case Study: Chapman International

    1154 Words  | 5 Pages

    Chapman International is firm which provides services for corporations, individuals and institutions by helping all of them to develop their individual, professional and marketplace influences. Over the past years, firm was operating very well and positive results were visible. They were known for stock growth but today they are facing the problem. Last year their earnings were high and their fourth quarter was very strong. In the first quarter they had 52 cents per share in the last year and now

  • Alexia Tech Corporation Case Study

    844 Words  | 4 Pages

    expenditures required to obtain future cash flows, and the effects of obsolescence. (para 11 SFAS 142) c) Jonas Tech Corp’s suggested treatment of goodwill is unacceptable because the U.S. GAAP requires that goodwill acquired in a business combination is allocated to the reporting unit through which it was obtained. (U.S. GAAP Goodwill Allocation). Therefore, Jonas Tech should not combine the goodwill from all its acquired reporting units into one Enterprise Goodwill

  • Ethical Issues In Managerial Accounting

    1433 Words  | 6 Pages

    Under US GAAP, Financial reporting should provide information that is useful to present and potential investors and creditors and other users in assessing the amounts, timing, and uncertainty of prospective net cash inflows to the related enterprise. (SFAC No. 1

  • The Pros And Cons Of Inventory Accounting Methods

    979 Words  | 4 Pages

    The choice of inventory accounting methods, specifically for the case of FIFO and LIFO, has developed into a decision, which includes varying consequences and comes with specific implications and benefits, such as communicating private information with FIFO (Hughes, and Schwartz, 1988, p.42) or tax benefits for the choice of LIFO (Morse and Richardson, 1983, p.125). Every firm and manager has to face the decision of which accounting method to choose, and has to include several aspects into their

  • FASB Accounting Standards Codification

    1827 Words  | 8 Pages

    The FASB Accounting Standards Codification (FASB Codification) is the only source of authoritative GAAP apart from SEC issued rules and regulations that apply only to SEC registrants. The FASB issues an Accounting Standards Update to inform people about changes to the FASB Codification, which includes changes to non-authoritative SEC content. In relation to International Financial Reporting Standards (IFRS), after a new IFRS Standard is issued and before it becomes effective, the International Accounting

  • Revenue Recognition In Airline Industry

    1963 Words  | 8 Pages

    agreement established between them and the buyer. According to real estate main services, they either construct new residential properties or managing them. In the case of renting them, the revenue recognition is normally accumulated in accordance to the GAAP. But in the case of construction, there would be two types of contracts, the first is when the agreement meets the construction design, and the second is the limited ability contracts. For the first type, the customer may change the design of the construction

  • Stan Sewell's Unethical Practices

    316 Words  | 2 Pages

    Stan Sewell is consciously and deliberately manipulating his balance sheet to read a much higher value than it should be. Traditionally, under the Generally Accepted Accounting Principles (GAAP), reporting of assets is based on either the historical value or the fair value (Casabona, & Shoaf, 2007). However, Stan Sewell fixed the value of the franchise based on his perception and his desire to benefit more than the franchise was worth. His intention of fixing this value to $500,000 instead of reporting

  • Cultural Conservatism In Accounting

    1043 Words  | 5 Pages

    The project investigates whether GAAP-mandated moderation will affect the accounting prosses or no. Furthermore, this conservation which is considered as cross-sectional changes in administrative rulesmight drive the differences in non-operating accumulations among nations. The research stated that legal and cultural origin could affect a country 's accounting rules. However, experts do not imagine the influences of GAAP-mandated reaction on the consequences to be very important