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My understanding is that at least the IFRS standards are developed precisely with the goal to fit all businesses in all industries. Whenever concerns come up th
by KKKKkkkk1 11y ago
My understanding is that at least the IFRS standards are developed precisely with the goal to fit all businesses in all industries. Whenever concerns come up that this is not the case, the standard is amended. And so companies who are making claims that IFRS does not adequately describe their business are justly met with suspicion. If GAAP does not work that way then it's one more reason to move on to IFRS.
- asbromberg 11y agoI think its wrong to think that any accounting system can ever be made to be appropriate for all industries (GAAP, IFRS, or anything else). They each require 100s of decisions and assumptions that may bias or mislead investors one way or another; its not like any one of those decisions is the "right" one either. Its more important that we make sure investors are aware of what those pitfalls are. Not to mention, the cost of asking every US company to switch to IFRS would be enourmous (though i'm sure the big 4 accounting firms wouldn't mind). As a side note, GAAP definitely isn't industry agnostic. For example, FASB (the financial accounting standards boards) issues guidance on revenue recognition for all sorts of companies and the guidance for a software company is very different than the guidance for your generic widget manufacturer.