GAAP vs. IFRS: Liabilities definitions Flashcards
GAAP vs. IFRS: Liabilities definitions
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GAAP U.S. accounting framework established by the Financial Accounting Standards Board, guiding financial reporting and liability presentation. IFRS International accounting standards set by the International Accounting Standards Board, used globally for financial reporting. Liability Obligation representing a future outflow of resources, typically listed by liquidity on financial statements. Financial Accounting Standards Board U.S. organization responsible for developing and issuing generally accepted accounting principles. International Accounting Standards Board Global body that creates and maintains international financial reporting standards. Bonds Payable Long-term debt instruments requiring periodic interest payments and eventual repayment of principal. Effective Interest Method Technique for amortizing bond premiums or discounts, ensuring interest expense reflects carrying value over time. Convertible Bonds Debt securities that can be exchanged for shares of stock, initially recorded as liabilities. Equity Ownership interest in a company, often resulting from conversion of certain debt instruments like convertible bonds. Working Capital Difference between current assets and current liabilities, indicating short-term financial health. Statement of Financial Position IFRS term for the balance sheet, displaying assets, liabilities, and equity at a specific point in time. Balance Sheet Financial statement showing a company's assets, liabilities, and equity, known as the statement of financial position under IFRS. Liquidity Order in which assets or liabilities are presented, based on how quickly they can be converted to cash or settled. Current Assets Resources expected to be converted to cash or used up within one year, crucial for working capital calculation. Current Liabilities Obligations due within one year, subtracted from current assets to determine working capital.