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Accounting in the UK: Differences between IFRS and US GAAP standards | News Flash

18 October 2022

In the field of UK accounting, there are two financial reporting standards – US Generally Accepted Accounting Principles (US GAAP) and International Financial Reporting Standards (IFRS).

IFRS is the most commonly used system in the world, and this method of accounting for publicly traded companies is used by more than 100 countries. The coalescence between IFRS and US GAAP is one of the bigger issues in the global implementation of IFRS. At present, all US entities have to file accounts prepared under local US GAAP except for the overseas issuer of securities, they have the option of using IFRS from 2010.

FASB and IASB continue to work collaboratively in the adoption of new standards.

We have compiled a clear table of the basic differences between IFRS and US GAAP below.

Comparative information For the previous period the statement of financial position is required for all the amounts that were reported in the financial statements The statement of financial position requires comparatives for the two most recent years
Value in use Discounted cash flow Undiscounted cash flow
Cash flow statements In cash and cash equivalents the bank overdrafts are included The bank overdrafts are treated as part of financing
Extraordinary items They are prohibited for IFRS They are not used anymore for US GAAP
Revaluation Can be applied Prohibited
Development costs Capitalisation as assets Costs in period when occurred
Component depreciation Required if components have different patterns of benefit Allowed but not common
Borrowing costs – interests May include more components The exchange rates are excluded


At Accace Adept, we focus mainly on accounting according to International Financial Reporting Standards . However, it can be challenging to become familiar with this topic, so our IFRS experts are ready to give you any advice you may require.

Michelle Martin
Managing Director | Accace Adept
Book a meeting with Michelle
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