Major Changes in IFRS and Comparison with US GAAP

Abstract

The evolution of International Financial Reporting Standards (IFRS) reflects the needs of the global business environment and the pursuit of higher quality financial reporting. This paper discusses and explores major changes implemented in IFRS, specifically in the areas of revenue recognition, lease accounting, and the treatment of intangible assets. The shortcomings of the past application of IFRS standards in these aspects are presented in this paper, as well as changes and benefits after IFRS made corresponding modifications. By reviewing materials and literature, the study conducts a comparison between IFRS and the United States Generally Accepted Accounting Principles (US GAAP). These two major accounting frameworks have adopted unique methods and standards. Still, both the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) work hard together to realize international harmonization. The outcomes of this research make it clear that ongoing refinements to IFRS have significantly improved the clarity, consistency, and comparability in how financial activities are reported. Such changes have been pivotal in diminishing uncertainties and bolstering the trustworthiness of financial disclosures. Being influenced by the continuous developments in IFRS, greater transparency and accountability in financial reporting will be achieved. This has made a great contribution to helping investors in sound economic decision-making and enhancing investor confidence.