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International accounting standards vs. the US

International accounting standards vs. the US - Microsoft Excel Tutorial

From the course: Excel for Accountants

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International accounting standards vs. the US

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- [Instructor] In the modern corporate world, many firms have operations not just in the U.S., but abroad. Because of that, it's important to be familiar with the dominant international accounting system, IFRS. Now, there's two major financial systems used around the world. In the U.S. we use GAAP, generally accepted accounting principles. Outside of the U.S., typically IFRS is used, in a fashion similar to perhaps the metric system. IFRS, or the International Financial Reporting System, differs from GAAP in a couple of key areas. First of all, GAAP is rules-based. GAAP tends to be more prescriptive than IFRS. In particular, under GAAP, specific industries and types of transactions have to be reported in particular ways. IFRS is built around a principles-based methodology, so it's perhaps a little bit more flexible. On the other hand, when it comes to fair value accounting, GAAP doesn't use fair value accounting to nearly the degree that IFRS does. IFRS requires fair value accounting…

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