Generally Accepted Accounting Principles (GAAP) — 1 Comment

  1. I find the article very interesting and am surprised that despite the fact that the United States is slowly shifting from GAAP to IFRS, the first one is still predominant. Unification of the world accounting standards would be beneficial to the global economy and could effectively increase transparency. As of now, GAAP may be interpreted differently by various parties and therefore could cause many discrepancies and hidden facts. The main difference between the two accounting standards is the fact that the US GAAP leaves much room for interpretation in terms of the capital and capital maintenance during the recession while IFRS includes more variables for justification within similar global scenario. If collided with IFRS it could be difficult for the companies investing in foreign markets to remain transparent, or simply credible. The SEC should accelerate the shift as the major US trade partners, such as the EU, China, and Brazil, have already shifted or are in the process.