Question

Question: Which of the following is false?

1. In general, IFRS note disclosures are more expansive compared to GAAP.
2. GAAP and IFRS have similar standards on subsequent events.
3. Both IFRS and GAAP require interim reports although the reporting frequency varies.

Segment reporting requirements are very similar under IFRS and GAAP

Short answer

Answer

The GAAP and IFRS require interim reports, but the reporting frequency varies.

Step-by-step solution

Meaning of GAAP

GAAP is a collection of accounting principles, methods, and rules organizations use to create or make financial statementsfor a given period.

Explaining the correct option

For a company's yearly financial statements to comply with IFRS Standards, interim financial statements are not essential to be arranged. Local laws and regulations, in any case, may stipulate the recurrence, such as quarterly or half-yearly, and demand that a company plan interim financial articulations statements.

Therefore, option (c) is a false statement.

Explaining the incorrect option

Option a) The main distinction between the two accounting systems is that GAAP is related to rules-based, whereas IFRS is based on principles. This discrepancy shows up in certain details and interpretations. In general, IFRS norms give substantially less information overall than GAAP.

Option b) Using an income statement, balance sheet, and statement of cash flows by both standards is a key similarity between GAAP and IFRS. Both strategies fundamentally work the same when dealing with cash and cash equivalents.

Option d) Segment reporting is the disclosure of a company's working segments within the disclosures in conjunction with its financial explanation statements. Segment reporting is vital for publicly exchanged companies but not privately held ones.