GAAP V. IFRS in Canada

Name:
University:
Course:
Professor:
Date:
GAAP V. IFRS in Canada
There are various accounting issues that are posed by use of international financial reporting standards (IFRS) and the Generally Accepted Accounting standards (GAAP). Issues arise in the use of the two accounting standards in Canada. This is because the two standards are not similar in all aspects. Although there are many similarities, the two standards may not be used together because of the few differences. The differences have brought many issues in Canada since the organizations are left in a dilemma of what accounting standards to use in its financial reporting. Businesses have a choice to select from the two accounting standards but are not allowed to use part of each accounting standards in developing financial statements in a particular fiscal period (Gibson 250-252).
The issues in reporting arise in the requirements in reporting financial information. The components of financial statements are different. In IFRS income statement is not a component of a complete set of financial statements; it is actually a sub-component of financial statements since it is an element of the statement of comprehensive statement. This shows that income statement is presented under the IFRS standards. on the other hand, a statement of comprehensive income is not a necessity under GAAP and may be presented under the statement of equity. In contrast to IFRS the statement of retained earnings is required and forms part of the financial statement (Gibson 253-254).
The disclosure of statement of changes in equity can be done in both the IFRS and GAAP. However, the GAAP provides that the changes may also be disclosed in notes to financial statements. The other issue can be identified in presenting a statement of a comprehensive income. Both the GAAP and the IFRS can present a statement of comprehensive income singly, or an income statement that shows profits and loss components separately and a separate comprehensive income statement. The difference in reporting comprehensive income statement is noted in the statement of equity where it is not displayed in IFRS while it is shown under GAAP (Gibson 256-258).
The other issues in reporting accounting information arise in the reporting the comparative information. Both the accounting standards require that comparative information to be shown using the preceding period as a benchmark but more periods would also be presented. However, a statement that displays the company’s financial position at the onset of the earliest presented period may be needed in certain special situations under IFRS. GAAP does not require a statement of financial position in the earliest period. This is a prevailing issue in reporting since under GAAP, the financial position of the business at the earliest comparative period is not required at any given circumstance. Businesses that use GAAP financial reporting can not use the current financial repor...