CHAPTER 4 - Accounting principles generally accepted in the United States versus those generally accepted elsewhere

Abstract

This chapter describes the accounting principles generally accepted in the United States versus those generally accepted elsewhere. The circumstances of inventory valuation are highly similar in the United States and the United Kingdom. In the lower of cost or market test, market means essentially replacement value in the United States and net realizable future sales value in the United Kingdom. Despite close similarities of circumstances, deferred income tax liabilities are generally recognized in the United States and only sparingly recognized in Canada. Deferred tax accounting is not a generally accepted accounting principle in Canada. Accounting terminology varies internationally to a considerable degree without good reason. United States' and United Kingdom's usage of the terms “reserve” and “provision differs,” French's use of the term “depreciation” differs from that in other European countries, and goodwill means nearly all things to all people. For the time being, meaningful international uniformity of generally accepted accounting principles should have full regard for differences existing in the environments in which accounting operates.