GAAP can be generally described as the set of all National Accounting Standards within a given country.Īnd as each country has its own GAAP, though bearing similarities, interpretations of the accounting standards might vary heavily from country to a country. The acronym “GAAP” stands for Generally Accepted Accounting Principles. Securities and Exchange Commission (SEC) has adopted the US GAAP instead. IFRS aim at establishing a harmonised accounting language, understood and “spoken” in any country and company, specifying exactly how accountants must maintain and report particular types of transactions and events in their financial statements.Ĭurrently, IFRS are standard in many parts of the world, including the European Union and many countries in South America and Asia, but not in the United States. IASB became the new standard setter, replacing the previously used IAS with newly developed International Financial Reporting Standards (IFRS). The committee was reorganised in 2001 and a new independent body was formed, the International Accounting Standards Board (IASB). In 1973, the International Accounting Standards Committee (IASC) was formed in London (as a result of an agreement between accountancy bodies of Australia, Canada, France, Germany, Japan, Mexico, the Netherlands, the UK and the USA), becoming the original organisation responsible for developing the International Accounting Standards (IAS). The increased economic integration and cross-border transactions and capital flows after World War II saw the need of harmonisation of the differences among the accounting principles guiding the major world capital markets. The first accounting standards were developed for public entries in the 1930s, following the Great Depression. Generally speaking, an accounting standard is a principal that guides accounting practices, specifying when and how certain transactions and economic events are to be recognised, classified, measured and presented. ![]() International Accounting Acronyms – IFRS – EVS Translations
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