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3-1 UCSB Anderson The Accounting Process Chapter 3 3-2 UCSB Anderson GAAP LITERATURE TRADITIONAL: Original pronouncements, issued by the FASB. SEPT. 2009 CHANGE: Codification issued by the FASB. DIFFERENCE: Codification is listed by topic which is much easier to perform research and capture all reules relating to a particular subject than the original pronouncements. 3-3 UCSB Anderson USGAAP… IFRS, WHATS UP WITH THAT? We use USGAAP in the United States. In many foreign countries they use International Financial Reporting Standards (IFRS, aka iGAAP). Some important highlights: UCSB teaching model based upon USGAAP. USGAAP & IFRS are both accrual based systems and are VERY SIMILAR: Even as we speak, some of these items are being changed in both USGAAP and IFRS to make them even more similar! » This is called “Convergence” IFRS tends to be EASIER and LESS DETAILED (principle based) The SEC proposes that by 2011 “large” public companies will be required to adopt IFRS Read between the lines… Small SEC companies and most private companies will continue to use USGAAP. We will reference key differences if applicable to concepts taught during this course and elaborate in an IFRS specific discussion at the end of the quarter. 3-4 UCSB Anderson Cash Basis versus Accrual Basis Accounting
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