How does this look? The primary difference between IFRS and GAAP is their approach to application. GAAP is more rule-based, detailed, and prescriptive, while IFRS is principle-based and relies more on professional judgement. In international transactions, there are several prominent issues to consider, specifically in relation to these differing standards. LIFO vs. FIFO, income taxes on cash, and fair value measurement. Under IFRS, the LIFO inventory method is not allowed. Under current law, the effect of the change from LIFO to FIFO can be spread over four years, creating a tax cost for CM Corporation when changing to IFRS standards (CITE). There are many differences in recognizing tax assets and liabilities that must be accounted for between GAAP and IFRS. Under IFRS, companies can elect to measure property, plant equipment, and investment property at fair value, these concepts may have an impact on debt-to-equity and other balance sheet ratios, resulting in limitations on interest deductibility (CITE)