Framework in the absence of a standard or

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framework in the absence of a standard or interpretation for an issue Under IFRS, company management is expressly required to consider the framework if there is no standard or interpretation for an issue
Objective of financial statements In general, broad focus to provide relevant info to a wide range of stakeholders. GAAP provides the separate objectives for business and non business entities In general, broad focus to provide relevant info to a wide range of stakeholders. IFRS provides the same set of objectives for business and non business entities Underlying assumptions The “going concern” assumption is not well-developed in the GAAP framework IFRS gives prominence to underlying assumptions such as accrual and going concern Qualitative characteristics Relevance, reliability, comparability and understandability. GAAP establishes a hierarchy of these characteristics. Relevance and reliability are primary qualities. Comparability is secondary. Understandability is treated as user-specific quality Relevance, reliability, comparability, and understandability. The IASB framework states that its decision cannot be based upon specific circumstances of individual users Definition of an asset The GAAP framework defines an asset as a future economic benefit The IFRS framework defines an asset as a resource from which future economic benefit will flow to company Balance sheet Recommends separation of current and noncurrent assets and liabilities Requires separation current and noncurrent assets and liabilities Deferred taxes Included with assets and liabilities Shown as separate line items on the balance sheet Minority interests Included in liabilities as a separate line item Included in equity as separate line item Bank overdrafts Charged as a financing activity May be included in cash if used in cash management Few of these differences are likely to cause major changes in any company’s reported results; a company with great results under GAAP won’t look terrible under IFRS, unless it got those results with an extraordinary item, which is an event that doesn’t occur on a regular basis such as a merger or corporate restructuring. Because extraordinary items are disclosed, someone looking at the financial statement would be able to make the adjustment easily.
Why LIFO is not allowed under IFRS ?

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