BUS 650 Week 3_DQs

 DQ: 01

The United States uses Generally Accepted Accounting Principles (GAAP) as the basis of financial reporting. The International Financial Accounting Standards (IFRS) is an alternative way to report financials.  This article from Ernst and Young compares the two methods of financial reporting.

Ernst & Young’s  US GAAP vs. IFRS: The Basics (http://www.ey.com/Publication/vwLUAssets/US_GAAP_v_IFRS:_The_Basics/$FILE/US%20GAAP%20v%20IFRS%20Dec%202011.pdf)

After reading the article from Ernst and Young, answer the following questions:

• How does the GAAP reporting method cause cash flows to differ from net income?
• How are the features of the Income Statement, Balance Sheet, and Statement of Cash Flow utilized in both the GAAP and the IFRS reporting methods?
• Does it make sense to adapt a worldwide standard for financial reporting?  Should this be mandated or voluntary?
• Calculate some of the potential costs and benefits of switching from GAAP to IFRS.

DQ: 02

Compare and contrast the Internal Rate of Return (IRR), the Net Present Value (NPV) and Payback approaches to capital rationing. Which do you think is better? Why?  Provide examples and evidence from two articles from Pro Quest to support your position. Your post should be 200-250 words in length.