GAAP (Generally accepted accounting Principles) and IFRS (International Financial Reporting Standards)

GAAP (Generally accepted accounting Principles) and IFRS (International Financial Reporting Standards).

Standard’s aim is to unify the accounting rules for the preparation.

Since 2005, united European companies, started using IFRS book-keeping method. Lithuanian organizations also started using those international standards. The transition is possible only if the accounting is properly managed in accordance with local standards and implementation stages of education. Even under these conditions, a complete transition of accounting to IFRS approximately takes around three years (according to the consulting company’s Mc Kinsey studies).

IFRS implementation costs usually pays off quickly. IFRS specialists are the most popular ones. According to recruitment company- „Encore“ study, IFRS department heads salary increased by 33%, based on 2008 wage dynamics.

Companies operate all over the world. Some organizations have worldwide existence. In order to avoid confusion, the International Accounting Standards Board (IASB) has created one unique accounting system which is called the International Financial Reporting Standards, most commonly known as IFRS.

International Financial Reporting Standards are standards, which are intended for reporting business affairs, which are understood all over the world and were created to establish global accounting system objectives. Because of the unique way with these standards, companies can be compared on a global scale.

• On the general global accounting system, internal communications are easier and better.

• Statement of comprehensive income, income statement and profit or loss;

International Financial Reporting Standards (IFRS) application - this is an area relevant to many companies and financial specialists. More than 90 per cent. the world's leading economies, might be required to use IFRS or own choosing to move to IFRS, because only a small number of companies can afford to ignore the need for their employees to acquire an understanding of IFRS and their impact on businesses and financial statements.

ACCA Diploma in IFRS field (DipIFR) - is an international qualification in IFRS area and it has developed the world's leading qualified accountants’ organization - Association of Chartered Certified Accountants (ACCA). By the end of this qualification, you will move to a higher professional competence in the IFRS field level.

• gain skills on how to prepare financial statements in accordance with IFRS, as well as the consolidation of the financial statements;

Balancing principle. This is the basic principle that affects all accounting. Each transaction must be accounted for in such way that there is a balance between what a company has, and to whom the company owes. Therefore, each operation must be displayed on a single account with debits and at the same time - another account with credits.

Company’s (cost object or cost unit) principle. It allows that the owner or owners that invested in company’s assets should be separated from his/her personal wealth. It means that each company is a separate unit of account, separated from the company's owners and other companies. It happened because the statements must be recorded in the company, and not the owner’s economic activity. This principle enables accountants to distinguish between transactions in person from the company's transactions. Company’s principle applies to all forms of business organization and in fact, that each of the company's assets and property and liability accounts separate from the owner’s assets and debt accounting.

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  • GAAP (Generally accepted accounting Principles) and IFRS (International Financial Reporting Standards)
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GAAP (Generally accepted accounting Principles) and IFRS (International Financial Reporting Standards). (December 5, 2016). Reviewed on 17:10, April 16 2021