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GAAP vs. GAAP: U.S. convergence to international accounting standards
Statement of Problem: The Financial Accounting Standards Board (FASB) has been working with the International Accounting Standards Board (IASB) to converge U.S. Generally Accepted Accounting Principles (GAAP) to International Financial Reporting Standards (IFRS). However, there are differences between the two accounting standards. What are the differences between U.S. GAAP and IFRS? How will the differences and the convergence project affect the United State's economy, companies, or the accounting profession as a whole? Sources of Data: 2007 Current Text, International Financial Reporting Standards, The CPA Journal, Journal of Accountancy, Price Waterhouse Coopers, Deloitte & Touche, Yahoo Finance, CFO.com, The Business Times Singapore, Accounting Today, Lawyers Weekly, American Institute of Certified Public Accountants, United States Law Firm Group, and Accountancy Ireland. Conclusion Reached: Based on the research performed, there are more similarities between U.S. GAAP and IFRS than there are differences. In addition, some differences ultimately equate to the same conclusion under both accounting standards. The convergence to IFRS should not negatively affect the U.S. economy, companies, or the accounting profession. Furthemore, IFRS typically results in a higher net income than U.S. GAAP.