50 Differences Between IFRS and US GAAP: A Detailed Comparison

1. Revenue Recognition: IFRS uses a principle-based approach, whereas US GAAP is rule-based.

2. Inventory Methods: IFRS does not allow LIFO, but US GAAP permits it.

3. Revaluation of Assets: IFRS allows revaluation of fixed assets; US GAAP generally does not.

4. Impairment of Assets: IFRS requires a one-step impairment test; US GAAP uses a two-step process.

5. Development Costs: IFRS allows capitalization of development costs if criteria are met; US GAAP typically expenses them.

6. Investment Properties: Under IFRS, investment properties can be measured at fair value or cost; US GAAP requires cost less depreciation.

7. Component Depreciation: IFRS requires component depreciation; US GAAP allows but does not require it.

8. Extraordinary Items: IFRS does not allow classification as extraordinary items; US GAAP permits it under certain conditions.

9. Convertible Debt: IFRS separates debt and equity components; US GAAP may treat it as a single liability.

10. Income Taxes: IFRS requires a deferred tax asset valuation allowance; US GAAP uses a more prescriptive approach.

11. Lease Accounting: IFRS recognizes leases on the balance sheet; US GAAP has operating and finance leases.

12. Fair Value Measurement: IFRS is broader in defining fair value; US GAAP provides more detailed guidance.

13. Cash Flow Statements: IFRS allows interest received to be classified as operating or investing; US GAAP typically classifies it as operating.

14. Biological Assets: IFRS requires fair value measurement; US GAAP typically uses cost.

15. Presentation of Financial Statements: IFRS requires a minimum presentation; US GAAP has detailed requirements.

16. Borrowing Costs: IFRS capitalizes borrowing costs directly attributable to asset acquisition; US GAAP has specific criteria.

17. Construction Contracts: IFRS uses the percentage of completion method; US GAAP allows both percentage of completion and completed contract methods.

18. Discontinued Operations: IFRS defines it more broadly; US GAAP has more specific criteria.

19. Employee Benefits: IFRS requires actuarial gains and losses in other comprehensive income; US GAAP allows corridor approach.

20. Intangible Assets: IFRS capitalizes if future economic benefits are probable; US GAAP has stricter criteria.

21. Operating Segments: IFRS bases segments on internal reports; US GAAP uses a similar but more prescriptive approach.

22. Inventory Write-downs: IFRS does not allow reversal; US GAAP allows it under certain conditions.

23. Financial Instruments: IFRS has a single standard (IFRS 9); US GAAP has multiple standards.

24. Non-controlling Interests: IFRS presents non-controlling interests in equity; US GAAP may classify differently depending on circumstances.

25. Goodwill Impairment: IFRS uses a one-step approach; US GAAP requires a two-step process.

26. Research Costs: IFRS expenses research costs; US GAAP follows similar rules but with different recognition criteria.

27. Foreign Currency Translation: IFRS uses a functional currency approach; US GAAP has a similar approach but different specifics.

28. Share-based Payment: IFRS expenses based on fair value; US GAAP also uses fair value but with different calculations.

29. Earnings Per Share: IFRS and US GAAP calculate EPS similarly but differ in detailed guidance.

30. Asset Exchanges: IFRS bases it on fair value; US GAAP may use book value depending on circumstances.

31. Provisions and Contingencies: IFRS requires recognition if outflow is probable; US GAAP uses a more detailed approach.

32. Accounting Changes: IFRS generally requires retrospective application; US GAAP may allow prospective application.

33. Segment Reporting: IFRS emphasizes management's view; US GAAP has more detailed requirements.

34. Deferred Revenue: IFRS defers when obligations exist; US GAAP follows a more rule-based method.

35. Discounting Liabilities: IFRS discounts non-current liabilities; US GAAP typically does not.

36. Depreciation Method: IFRS requires a review of useful life annually; US GAAP may not require annual reviews.

37. Joint Ventures: IFRS allows the equity method; US GAAP has different treatments based on control.

38. Statement of Changes in Equity: IFRS requires a statement of changes in equity; US GAAP allows this information to be presented in the notes.

39. Pension Plan Accounting: IFRS uses a projected unit credit method; US GAAP also uses it but with different assumptions.

40. Advertising Costs: IFRS expenses as incurred; US GAAP may capitalize under certain conditions.

41. Revenue from Contracts with Customers: IFRS 15 applies to all contracts; US GAAP uses ASC 606 with different interpretations.

42. Disclosures: IFRS requires disclosure of key management compensation; US GAAP does not require this level of detail.

43. Interim Reporting: IFRS treats interim reports as discrete periods; US GAAP considers them integral to the annual period.

44. Financial Guarantee Contracts: IFRS treats them as insurance contracts; US GAAP has separate standards.

45. Investment in Associates: IFRS uses the equity method; US GAAP also uses equity but with different criteria.

46. Government Grants: IFRS recognizes grants based on reasonable assurance; US GAAP may defer recognition.

47. Convertible Instruments: IFRS separates debt and equity; US GAAP may treat the entire instrument as debt.

48. Disclosures of Risk Management: IFRS requires detailed risk management disclosures; US GAAP has fewer requirements.

49. Depreciation of Assets: IFRS allows more flexibility in methods; US GAAP provides specific methods and guidelines.

50. Presentation of Expenses: IFRS allows a choice between function or nature; US GAAP typically requires a functional presentation.