Asked by Justice Kay-Lease on Jun 14, 2024
Verified
While both IFRS and GAAP require companies to consolidate entities they control,IFRS defines control more narrowly than GAAP.
IFRS
International Financial Reporting Standards; a set of accounting standards developed by the International Accounting Standards Board (IASB) that aim to standardize financial reporting globally.
GAAP
Generally Accepted Accounting Principles; the standard framework of guidelines for financial accounting used in any given jurisdiction, particularly in the United States.
Control
The power to influence or direct people's behavior or the course of events, especially in the context of corporate governance or management.
- Acquire knowledge of the circumstances that require a variable interest entity to be integrated into consolidated financial statements.
Verified Answer
MW
Muhammad WaqasJun 17, 2024
Final Answer :
False
Explanation :
IFRS defines control based on the ability to direct the relevant activities of an entity, often leading to a broader interpretation of control, whereas GAAP has specific, detailed criteria for determining control, which can sometimes result in a narrower definition of control.
Learning Objectives
- Acquire knowledge of the circumstances that require a variable interest entity to be integrated into consolidated financial statements.