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GAAP vs. IFRS: Classified Balance Sheet definitions Flashcards

GAAP vs. IFRS: Classified Balance Sheet definitions
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  • GAAP
    U.S. accounting standards set by FASB, emphasizing historical cost and a specific balance sheet format.
  • IFRS
    International accounting standards set by IASB, allowing asset revaluation and using different balance sheet terminology.
  • FASB
    U.S. organization responsible for establishing and updating generally accepted accounting principles.
  • IASB
    International body that develops and issues global accounting standards for financial reporting.
  • Classified Balance Sheet
    Financial statement dividing assets and liabilities into current and long-term categories using a one-year threshold.
  • Statement of Financial Position
    IFRS term for the balance sheet, typically listing equity before liabilities and assets in reverse liquidity order.
  • Historical Cost Principle
    Accounting guideline requiring assets to be recorded at their original purchase price, ensuring consistency over time.
  • Fair Value Principle
    IFRS guideline allowing assets to be updated to reflect current market values, resulting in more frequent valuation changes.
  • Current Assets
    Resources expected to be converted to cash or used up within one year, such as cash and receivables.
  • Long-term Assets
    Resources expected to provide economic benefit beyond one year, including equipment and long-term investments.
  • Current Liabilities
    Obligations due within one year, such as accounts payable and short-term loans.
  • Long-term Liabilities
    Obligations not due within the next year, including bonds payable and long-term loans.
  • Equity
    Residual interest in assets after deducting liabilities, often presented before liabilities under IFRS.
  • Liquidity
    Measure of how quickly assets can be converted to cash, with IFRS listing assets in reverse order of this characteristic.
  • Share Investments
    IFRS term for investments in other companies' shares, equivalent to 'investments' under GAAP.