What You Need To Know!!!
What is one of the biggest issues confronting US GAAP and IFRS convergence? It is inventory! The way inventory is accounted for, to be precise. LIFO, permitted by GAAP, but not allowed by IFRS increases Cost of Goods Sold and thus decreases Net Income for the period. Investors don’t mind an apparently lower income because, in this case, it means the company will pay fewer taxes as well. This is one example where accounting for tax and financial reporting must be the same.
Read full article on Journal of Accountancy.
By Michael Wander
Hello ZGAS Members,