GAAP and IFRS/IAS

Generally Accepted Accounting Principles & International Financial Reporting Standards

Title:	Generally Accepted Accounting Principles, as elaborated by the U.S. Federal Accounting Standards Advisory Board (FASAB); and International Financial Reporting Standards, as elaborated by the International Accounting Standards Committee (IASC) Note: before 2001, standards from the IASC were called ‘International Accounting Standards’ (IAS), rather than IFRS. However, IASes remain relevant until/unless replaced by an IFRS.
Source reference:	http://www.fasab.gov/accepted.html and http://www.iasb.org/Summaries+of+International, respectively.
Topic:	Both are sets of standards related to good accounting practices (which are also generically referred to as Generally Accepted Accounting Practices, without specifically meaning the U.S. version), the first being issued by a U.S. institute (but with international following), and the second being international from the onset.
Direct / indirect relevance	Indirect. The observance of accounting standards implies an obligation to implement appropriate RM/RA measures with regard to network/information security.
Scope:	Sets of practices to be observed by accountants affected by them.
Legal force:	Legal force depends from country to country. In some countries GAAPs (in a generic sense) are not emphatically included in their legislation, although supervisory authorities may require that they be followed e.g. for publicly traded companies. In the E.U., adherence with the IFRS is mandatory for publicly traded companies since 2005, at least for IASC standards which have been adopted by the Commission following the opinion from the Accounting Regulatory Committee (ARC – see http://ec.europa.eu/internal_market/); see also http://www.iasplus.com/country/useias.htm
Affected sectors:	Any organisation or enterprise legally required to keep accounting documents.
Relevant provision(s):	Given that the entire purpose of GAAPs (in a generic sense) is to prescribe the accounting practices to be observed, all standards within a GAAP are relevant for the evaluation of an undertaking’s RM/RA policies. IFRS/IAS presently cover the following topics: IFRSs: • IFRS 1 First-time Adoption of International Financial Reporting Standards • IFRS 2 Share-based Payment • IFRS 3 Business Combinations • IFRS 4 Insurance Contracts • IFRS 5 Non-current Assets Held for Sale and Discontinued Operations • IFRS 6 Exploration for and evaluation of Mineral Resources • IFRS 7 Financial Instruments: Disclosures • IFRS 8 Operating Segments IASs: • IAS 1 Presentation of Financial Statements • IAS 2 Inventories • IAS 7 Cash Flow Statements • IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors • IAS 10 Events After the Balance Sheet Date • IAS 11 Construction Contracts • IAS 12 Income Taxes • IAS 16 Property, Plant and Equipment • IAS 17 Leases • IAS 18 Revenue • IAS 19 Employee Benefits • IAS 20 Accounting for Government Grants and Disclosure of Government Assistance • IAS 21 The Effects of Changes in Foreign Exchange Rates • IAS 23 Borrowing Costs • IAS 24 Related Party Disclosures • IAS 26 Accounting and Reporting by Retirement Benefit Plans • IAS 27 Consolidated and Separate Financial Statements • IAS 28 Investments in Associates • IAS 29 Financial Reporting in Hyperinflationary Economies • IAS 31 Interests in Joint Ventures • IAS 32 Financial Instruments: Presentation • IAS 33 Earnings per Share • IAS 34 Interim Financial Reporting • IAS 36 Impairment of Assets • IAS 37 Provisions, Contingent Liabilities and Contingent Assets • IAS 38 Intangible Assets • IAS 39 Financial Instruments: Recognition and Measurement • IAS 40 Investment Property • IAS 41 Agriculture (Source: http://www.iasb.org/)
Relevance to RM/RA:	Depending on their legal force, GAAPs (in a generic sense) either require or recommend companies to respect certain standards and interpretations with regard to their accounting practices. Companies are therefore required/recommended (depending on the legal framework) to assess whether or not their existing practices are in full compliance with whatever GAAP are applicable to their business processes.

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