Country Differences in Accounting Standards Essay

Country Differences in Accounting Standards - Essay Example The United States of America perform its accounting and the respective financial statements utilizing the generally accepted accounting principles (GAAP). In the United Kingdom a different set of financial standards is being utilized called the financial reporting international standards. The platform utilized in Europe is an international project to standardize the financial reporting standards of corporation across the world. In Europe any company selling its stocks in any registered stock exchange such as the London Stock Exchange (LSE) must release financial standards prepared following the international reporting financial standards. Canada is a nation that is evaluating a transition from Canadian GAAP to IFRS. The new international financial reporting standards are geared towards providing a simple system with flexibility to personalize the system since it is not a rigorous as GAAP. Simplicity allows corporations to achieve savings in their administrative function. There are differences and similarities in the way a company using generally accepted accounting principles or international financial reporting standards are prepared. The GAAP required the financial statements to follow an exact format which the company can not deviate from, while the IFRS has multiple formats. The valuation of investments is performed in GAAP at the cost of the investment and earnings or losses are registered once the investment is sold. In the IFRS the value of the investment goes at fair market value. The investment segment of a GAAP prepared statement is very detailed and illustrates the value of each individual investment. In the international financial reporting standards investment are included at the discretion of the accountants responsible for preparing the financial statements. The consolidated financial statements of GAAP financial statements include subsidiary information only