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1RUNNING HEAD: TARGET ANALYSISFinal Project: Target AnalysisNicole Stevens 15 September 2019ACC-610 Financial ReportingProfessor Christina Ward, CPA, MSASouthern New Hampshire University
2TARGET ANALYSISIntroduction to Generally Accepted Accounting Principles (GAAP)Generally Accepted Accounting Principles (GAAP) refers to the standard framework, principles and procedures that are used by companies for financial accounting (Surbhi, 2017). GAAP is a set of accounting standards that consist of standard ways or rules for recording and reporting their financial information which includes the balance sheet, income statement, cash flow statement, etc. These principles are meant to ensure a minimum level of consistency with company’s financial statements. This is a primarily rules-based system (Surbhi, 2017).Introduction to International Financial Reporting Standards (IFRS)International Financial Reporting Standards (IFRS) are a set of international accounting standards that state how particular types of transactions should be reported in financial statements. IFRS specify exactly how accountants must maintain and report their accounts and are ser forth by the International Accounting Standards Board (IASB) (Surbhi, 2017). These standards were established to have a common accounting language so financial statements can beunderstood from country to country. IFRS ensures comparability and understandability of international business and is aimed to provide users with information about the financial position, performance, profitability and liquidity of the company. This is principles-based system(Surbhi, 2017).GAAP vs IFRSGeneral Accounting Principles and International Financial Reporting Standards are both guiding principles that help in the preparation and presentation for financial accounting (Surbhi, 2017). Both provide relevance, reliability, transparency, comparability, understandability of a financial system. Although both principles share this, there are key differences. First, GAAP is a set of guidelines and procedures which IFRS is a universal business language. Next, GAAP
3TARGET ANALYSISshows items below the statement of income whereas per IFRS does not segregate these items. IFRS is based on principles where GAAP is based on rules (Surbhi, 2017).IFRS provides muchless detail and leaves more room for interpretation compared to GAAP. Lastly, International Financial Reporting Standards and Generally Accepted Accounting Principles differ when it comes to how inventory is recorded. IFRS does not allow the last-in, first-out method (LIFO) while GAAP standards follow LIFO. On the other hand, both procedures allow the first-in, firs-out method (FICO) and the weighted average-cost method. IFRS also permits inventory reversals under certain conditions as GAAP does not allow it at all.

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Term
Winter
Professor
DL
Tags
Balance Sheet, Revenue, Generally Accepted Accounting Principles, International Financial Reporting Standards, Target Corporation

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