Recently, the FASB and International Accounting Standards Board (IASB) have been working on several projects in order

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Question:

Recently, the FASB and International Accounting Standards Board (IASB) have been working on several projects in order to harmonize the accounting rules between GAAP and IFRS. This project requires you to select an accounting area where there are differences between U.S. and International accounting standards. Your presentation should address the issues listed below.

Required:

1. Pick an accounting area where there currently are differences between US GAAP and IFRS and explain the nature of the differences. (Hint: there are plenty of resources online. I provide several readings for your reference)

2. First, provide an overview on the philosophy behind IFRS and US GAAP

3. Discuss pros and cons for the method of accounting under US GAAP and IFRS, respectively. Based on your discussion, under what circumstances (e.g., what types of firms, market conditions, etc) are the US GAAP standards is better and under what circumstances are the IFRS standards is superior? (Hint:you are free to compare the two standards in any perspective. In addition, you were introduced to the concept of relevance, reliability, consistency and comparability as four desirable attributes of accounting information along with other attributes (e.g. conservatism) in Chapter 2. To some degree, these perspectives may help you identify pros and cons and facilitate your discussion.)

4. Do you agree with convergence or not? Explain why? What are the costs and benefits? Consider the issue broadly from the perspective of financial statement users, preparers, and auditors. Are there any problems created by convergence/harmonization? Explain in detail.

5. Give us an update on what the IASB and FASB plan to do to converge the standards in the accounting area you picked. What is their proposal and timeline? Do you have your own proposal? Why is it better?