How does GAAP differ from IFRS reporting?
Transitioning from GAAP to IFRS presents a business risk that should be addressed in the same manner used in the organization’s normal risk management process to mitigate risk. Boards must continue to gather information about potential pitfalls with the transition and take action to address those concerns. For example, a board may require new or different skill sets than those currently required to be able to question management’s decisions under the IFRS framework. Some examples include: • IFRS utilizes several criteria for revenue recognition including the transfer of risks, rewards and control, and reliable measurement. While GAAP utilizes similar principles in theory, the big difference is the inclusion of substantial detailed guidance regarding specific transactions that can lead to departures from the general theory. • GAAP allows for the inclusion of extraordinary items (events that are both infrequent and unusual) in the financial statements, whereas extraordinary items are pro
