There are two known accounting standards that are being used when it comes to financial reporting.
GAAP - Generally
Accepted Accounting Principles
- GAAP are commonly-followed accounting rules and standards
for financial reporting.
- The standards are prepared by the (FASB) Financial
Accounting Standards Board
- In the U.S., GAAP is mandatory for publicly traded and regulated companies.
IFRS - International
Financial Reporting Standards
- The standards are promulgated by the (IASB) The
International Accounting Standards Board
- About 120 nations and reporting jurisdictions permit or
require IFRS for domestic listed companies
GAAP vs IFRS
-
Primary difference is that GAAP is rules-based
and IFRS is principles-based.
-
Found this helpful article that sites the key
difference in these two accounting standards.
Though, these standards might look complicated for many (even to accountants), always remember that they were created mostly using the accounting principles as foundation.