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Generally Accepted Accounting Principles (GAAP):
They are commonly known as GAAP. It is a collection of generally practiced and followed rules and standards of accounting. GAAP provides global guidelines for preparation and disclosure of financial statements of public companies. It is created and developed by International Accounting Standards Board (IASB).
International Financial Reporting Standards (IFRS):
It is a collection of generally practiced and followed rules and standards of accounting. GAAP provides global guidelines for preparation and disclosure of financial statements of public companies. It is created and developed by International Accounting Standards Board (IASB).
To compare: The financial statement terms used in GAAP that contrast with IFRS
Explanation of Solution
Comparison of financial statement terms used in GAAP that contrasts with IFRS:
| GAAP Financial Statement Term | IFRS Financial Statement Term |
| Statement of comprehensive income | Statement of comprehensive income |
| Interest expense | Finance costs |
| Net income | Profit for the year |
| Excess of issue price over par | Share premium |
| Trading investments | Financial assets at fair value through profit or loss |
| Wages payable, or salaries payable, or payroll taxes payable | Employee provisions |
| Notes payable | Loans |
| Balance sheet |
Table (1)
Thus, the financial statement terms used in GAAP are compared with those used in IFRS.
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