GAAP/ IFRS- Impairment of assets

Name:
University:
Course Title:
Instructor:
Date:
GAAP/ IFRS- Impairment of assets
Countries have for many years developed and embraced their forms of accounting standards, many of their accounting standards are tax oriented, principle based, rules based or business oriented. Due to globalization and business transaction within different countries and continents, there has been a strong need to harmonize these standards to ensure they are applicable to any country in the world. By late ‘90s, many states especially, in U.S had started adopting IFRS (International Financial Reporting Standards) and GAAP (Generally Accepted Accounting Principles). In 1999, FASB (Financial Accounting Standards Board) came up with a convergent project to bring together or rather harmonize the two standard setters (GAAP) and IFRS), FASB came up with five different initiatives that include (Holt, 2003):
All members from the two standard setter link with FASB offices
Both setters should conduct joint projects like revenue recognition project, financial statement presentation and conceptual framework recognition.
Both setters should allow direct supervision from FASB as a long-term initiative
Both setters should express consideration of convergence initiative in their board agenda
Both GAAS and IFRS should follow short-term initiatives put in place by FASB
The initial difference is the language used by GAAP, they have adopted terms that are easy and applicable in the U.S compared to…