week 4 hw

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50 points

1) (TCO A) Why are some of the major differences between iGAAP and U.S. GAAP? Explain in detail. 

U.S. GAAP and iGAAP have major differences in the areas of asset valuations, inventories, and several other areas. The balance sheets are quite different, because iGAAP lists long-term assets first in many cases. In addition, the U.S. GAAP is considered to be more rules based, whereas the iGAAP is based on principles. iGAAP allows for more leeway for financial issuers for disclosing many types of financial operations, whereas U.S. GAAP is stricter in this regard.

2)

Question 2.

Question :

(TCO A) What is FASB Codification? Explain in detail.

 

Student Answer:

 

In the past, GAAP documents, varied in format, completeness and structure. Professionals were concerned on how to prepare financial statements in accordance with the correct authoritative manner. The FASB decided to streamline "principles" by creating a "Codification" system. FASB created a database and research system that standardized and pulled together the authoritative resources of standards into one system. This is named the CRS. The CRS is an online real-time database providing access to the Codification. The FASB Codification can be accessed at http://asc.fasb.org/home. The FASB Codification framework breaks down into 4 groups or levels: 1) Topic - Guidance on a subject 2) Subtopics - Topic subset differentiated by type or scope 3) Sections - Describes the type of content within the subtopic 4) Paragraphs - Includes the details related to the topic

 

Instructor Explanation:

The codification takes the statements and other pronouncements and arranges the information by topic. Per the FASB, the new system will 1.  reduce the amount of time and effort required to solve an accounting research issue; 2.  mitigate the risk of noncompliance with standards through improved usability of the literature; 3.  provide accurate information with real-time updates as new standards are released; and 4.  assist the FASB with the research and convergence efforts required during the standard-setting process.