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GAAP vs. IFRS: Receivables definitions Flashcards

GAAP vs. IFRS: Receivables definitions
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  • GAAP
    A set of accounting standards used in the US, established by the Financial Accounting Standards Board, emphasizing strict account titles.
  • IFRS
    A global set of accounting standards created by the International Accounting Standards Board, focusing on transparency over strict account titles.
  • Financial Accounting Standards Board
    The US organization responsible for developing and maintaining the rules that comprise GAAP.
  • International Accounting Standards Board
    The international body that sets and updates IFRS for use outside the US.
  • Receivables
    Amounts owed to a business by customers, typically arising from sales made on credit.
  • Allowance for Doubtful Accounts
    A contra-asset account estimating the portion of receivables unlikely to be collected.
  • Impairment of Receivables
    A reduction in the value of receivables when collection is considered unlikely, reflecting potential bad debts.
  • Sales Returns
    Amounts credited to customers for returned goods, reducing total receivables.
  • Allowances
    Reductions in receivables for issues like damaged goods or pricing errors, separate from returns.
  • Discounts
    Deductions from receivable amounts offered to customers for early payment or other incentives.
  • Factoring
    The process of selling receivables to a third party to obtain immediate cash, transferring collection risk.
  • Account Titles
    Specific names assigned to accounts in financial records, with GAAP requiring more precision than IFRS.
  • Transparency
    The principle of providing clear and understandable financial information, emphasized under IFRS.
  • Bad Debts
    Receivable amounts deemed uncollectible, often leading to impairment or write-off.