Answer:
.4. The Income Statement required under IFRS with some differences as compared to GAAP.
Explanation:
GAAP otherwise known as Generally Accepted Accounting Principles, which is a term that describes companies' responsibility to present financial reports on their cash flow, profit making operations, and all-encompassing financial conditions.
There are three majors financial statements required under GAAP, they includes:
1. The Income Statement
2. The Balance Sheet
3. The Cash Flow Statement
While IFRS is an acronym for International Financial Reporting Standards which is also a term that describe the financial performance of a company, such that the financial statements of the company are well understood globally. They are often used by companies who have on public stock exchange, listed their shares and securities.
IFRS has five major financial statements, which includes:
1. Balance Sheet: a statement of financial position
2. Income statement: A statement of comprehensive income
3. Statement of changes in equity
4. Statement of cash flow
5. Summary notes of accounting policies that are significant
However, while there as some similarities between the two when it comes to preparation of Income Statement, there are still major differences as well.
Differences in Income Statement in GAAP and IFRS includes the following:
1. Format of the income statement
2. Extraordinary Items
3. Exceptional Items
4. Revenue Recognition
5. Software Revenue Recognition
6. Discounting of Revenue
7. Development Cost
8. Prior Service cost in Employee benefit plan
9. Expense Recognition - Gain and Losses
10. Accounting of Taxes
