GAAP (Generally accepted accounting Principles) and IFRS (International Financial Reporting Standards)

International Financial Reporting Standards. Introduction to IFRS. Advantages of using IFRS. Who can use IFRS? Requirements for IFRS. What are IFRS Standards? How IFRS differs on key issues from US GAAP. General Accounting Principle. General accounting principles- accounting system is based on. Different GAAP systems. Ifrs against us gaap. Effects of combining GAAP and IFRS. Gaap to ifrs. Conclusion. References.

International accounting standards (International Financial Standards) - is a unified financing documentation’s processing rules. They have been created by English standards.

Standard’s aim is to unify the accounting rules for the preparation.

• On the general global accounting system, internal communications are easier and better.

Public entities or businesses, which includes companies that are evaluated in the stock exchanges, part of the public interest or the public sector. These companies should implement IFRS standards.

• Statement of comprehensive income, income statement and profit or loss;

2. How IFRS differs on key issues from US GAAP?

• IFRS uses a single-step method - the value of the write-off,

Market countries are accounted for in accordance with generally accepted principles. They are commonly referred to as Generally Accepted Accounting Principles. Those are the accounting rules for the handling of accounting. General accounting principles determine the most general requirements which must be accepted with the formation of financial reporting information. Their importance can be compared with a person's ability to speak the other language. The most common set of accounting principles International Accounting Standards (IAS) and the European Union in the fourth Directive.

General accounting principles define the provisions which are based on conceptual accounting rules. They are considered to be common because of two reasons:

• They are guided by leading accounting and preparing financial statements in all areas (industrial, constructional, agricultural, commercial or otherwise) working in the accounting staff.

3.1 General accounting principles - accounting system is based on

All other accounting principles are considered to be derived from these. I will discuss the most important accounting principles by which Lithuanian companies should keep their financial records.

Periodicity Principle. Continuing operation principle is very closely linked to the periodicity or frequency principle. It is accepted that company's business activities fall into a fixed reporting periods, in such way so it would be possible to prepare economic activity accounts. Reports may be made monthly, quarterly, annually or by any other period of time. The main reporting period does not necessarily coincide with the calendar year.

Accounting consistency principle states that the accounting methodology has to be stable for quite a long period of time, at least several years. Constant methodology is necessary so that the accounting information users often analyze the performance of the company over several reporting periods. Accounting change in methodology would affect the company's final performance. The consistency principle does not mean that the company's accounting methods cannot be changed. Accounting methods and techniques must be continuously improved. However, they need to be thoroughly investigated and to be absolutely certain of their method of application and only then to start using it in the company. The company’s notes about their accounts in addition, provide information on how they have been affected by the performance of the new accounting methods.

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GAAP (Generally accepted accounting Principles) and IFRS (International Financial Reporting Standards). (2016 m. Gruodžio 05 d.). Peržiūrėta 2019 m. Liepos 22 d. 02:05
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