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Globalization has led to many nations teaching and following concepts of IFRS. United states of america based organizations stick to the guidelines of GAAP which causes complications for United states of america businesses looking to accomplish business internationally. Both practices of accounting offered accurate and useful interpretations of a business’s financial situation. Nevertheless comparing a statement that is financial had been made after GAAP to a statement that follows IFRS can lead to meaningful discrepancies.

The United States uses GAAP or accounting that is generally accepted for financial reporting. GAAP are guidelines that must be followed on financial statements and only are appropriate within the United States. Unlike GAAP, IFRS or International Financial Reporting guidelines is principal based. What this means is when business deals occur GAAP must follow a certain development of steps to record it. Whereas IFRS is able to interpret the transaction is several ways that are …