What Is the Fundamental Difference Between IFRS and GAAP

question 68

Multiple Choice

What is the fundamental difference between IFRS and GAAP?

• A) GAAP relies more on general principles but ignores the spirit of those principles.
• B) GAAP relies more on specific rules and the spirit of the rules.
• C) GAAP relies more on specific rules but not the spirit of the rules.
• D) GAAP relies more on general principles as well as the spirit of those rules.

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Definitions:

Cash Method

An accounting method where revenues and expenses are recognized at the time cash is received or paid out.

Record Income

The total income reported by an individual or entity for a specific period, usually for tax purposes.

Damaged House

A property that has suffered physical harm affecting its value or functionality, often through natural disasters or accidents.

Bonds

These are fixed-income investment products where an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate.