IFRS and US GAAP: similarities and differences - 2015 edition

09/17/2015

Download: IFRS and US GAAP: similarities and differences - 2015 edition

This PwC publication provides a broad understanding of the major differences between IFRS and US GAAP, as well as insight into the level of change on the horizon.

PwC Partner David Schmid provides an overview of the updates contained in the 2015 edition of IFRS and US GAAP: similarities and differences.

To be successful in the US capital markets, it is increasingly important to be financially bilingual – you have to speak both IFRS and US GAAP.

Why, you ask, given that there are no current US plans to require or permit domestic public companies to use IFRS?  Because we operate in a global marketplace and the impact of IFRS on US capital markets is not just about its domestic use in capital filings.

IFRS requirements elsewhere in the world affect many US companies – public or private, large or small — through cross-border, M&A activity, and due to the IFRS reporting demands of stakeholders outside the US. And the continued global adoption of IFRS means that the impact on multinational US businesses will only grow stronger, as additional countries permit or require IFRS for statutory reporting purposes and public filings.

From an investor perspective, the need to understand IFRS is arguably even greater. US investors keep looking overseas for investment opportunities. Recent estimates suggest that over $7 trillion of US capital is invested in non-US securities. The US markets also remain open to non-US companies that prepare their financial statements using IFRS. There are currently over 450 non-US filers with market capitalization in the multiple of trillions of US dollars who use IFRS without reconciliation to US GAAP.

To assist investors and preparers in becoming financially bilingual, this publication provides a broad understanding of the major differences between IFRS and US GAAP, as well as insight into the level of change on the horizon. It focuses on the most significant and common differences.

How to use this publication

This publication is designed to alert companies, investors, and other capital market participants to the major differences between IFRS and US GAAP as they exist today, and to the timing and scope of accounting changes that the standard setting agenda’s of the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) (collectively, the Boards) will bring.

This publication considers authoritative pronouncements and other developments under IFRS and US GAAP through June 1, 2015.

We continue to believe in the long-term vision of a single set of consistently applied, high-quality, globally accepted accounting standards. However, acceptance of an outright move to international standards is off the table, at least for now. In the meantime, the FASB and IASB should continue to focus on improving the quality of their standards while, if possible, reducing differences between IFRS and US GAAP.

Downloading the guide onto an iPad

  1. Click on the following CFOdirect link to open the IFRS and US GAAP: similarities and differences - 2015 edition.
  2. Click on"Download."
  3. When the pdf opens, click anywhere on the guide and a menu will pop up at the top of the page with an option to “Open in iBooks” (top right). Click on this button.
  4. The guide will then be saved to your iBooks app for future access.