Question

Question: Answer each of the following related to international accounting standards.

a. Explain (in general terms) how the accounting for recognition of receivables is different between IFRS and U.S. GAAP.

Short answer

Recognition of receivablesis a term used when the organizations followthe accrual basis of accounting to report its amount ofaccounts receivables.

Step-by-step solution

Step 1:Introduction

The financial apex body defines the standards for reporting financial transactions in the United States. The companies need to follow systematic reporting standards while recording their daily transactions.

Explanation

The criteria for evaluating the recognition of receivables are similar in both IFRS, i.e., International Financial Reporting Standards Systems and the GAAP, i.e., Generally Accepted Accounting Principles.

Under the IFRS, the recognition of receivables is defined under the earning process. On the other hand, GAAP is considered a realization principle that each firm has to follow while making their books of accounts.