U.S. GAAP vs. IFRS Research Paper Example | Topics and Well Written Essays - 500 words

U.S. GAAP vs. IFRS - Research Paper ExampleThis allows matching of the accounting contract costs, as well as revenue with the accounting periods in which the aspect work takes place (Bohusova, 2009). Another factor is that the accounting of fixed price construction contracts is done using percentage of the completion technique. According to Intermediate bill (2008), under such as case, the faultless contract method is not permitted there is no specific guidance on software revenue designation and the guidance on sales of real(a) estate is limited (p.102).On the other hand, U.S. GAAP is based on rules thus, it lacks an extensive guidance regarding revenue scholarship specific to the type of contract or industry. Its revenue recognition is divided into two levels with the first part being the guidance in concepts statements. In the heartbeat level is the guidance for revenue recognition in particular industries, as well as transactions that are economically different. Revenue r ecognition in this case depends on two criteria that must be met as defined in the FASB Concepts Statement No.5, which notes that revenue must be realizable, as well as earned (Bohusova, 2009). Another point of difference is that in this case, the accounting for the construction contracts uses the percentage-of-completion method only on condition that certain criteria are met if not the completed contract method is applied. Finally, GAAP unlike IFRS provides for a detailed on the recognition of software revenue, as well as on accounting for real estate sales (Intermediate Accounting, 2008).In IFRS financial statement, the net income is exclusive of the interest expenses and interest revenues. IFRS reports on interest income with regard to financing activities only happens when the future economic benefits are put in place. On the other hand, GAAP performs report of its income under investing