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Bridging gaps: IFRS vs GAAP for financial harmony.

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TLDR:

1. IFRS and GAAP have lingering differences that impact financial statement items.

2. The SEC has postponed the decision to require U.S. registrants to adopt IFRS.

Key Elements:

In 2002, FASB and IASB started convergence efforts to reduce differences between IFRS and GAAP.

While progress has been made, significant differences still exist, particularly in areas like inventory, investments, and fixed assets.

Eight largest foreign registrants using IFRS showed various differences with GAAP, such as in inventory impairment, development costs, and lease accounting.

Adjustments may be needed for users to compare IFRS and GAAP financial information for a clearer picture.

Without renewed convergence efforts or a mandate from the SEC, the existing differences are likely to persist for the foreseeable future.


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