What is the difference between GAAP and IFRS Income Statements?

GAAP and IFRS are two different types of income. GAAP stands for Generally Accepted Accounting Principle. It includes guidelines that are set in place by the Financial Accounting Standards Board. Under GAAP, companies have a specific format to file their financial statements under. IFRS stands for International Financial Reporting Standard. Under this standard, the IFRS has no format that the statements must adhere to. IFRS will display many things, like the tax expense, loss of profits, and the cost of finances. GAAP and IFRS also differ when it comes to the change that occurs inequity and the financial statements.

As of now, there are two different standards of income. One would be GAAP or Generally Accepted Accounting Principle, and the other is IFRS or International Financial Reporting Standard. GAAP is a set of guidelines issued by the Financial Accounting Standards Board.

Companies must prepare their financial statements according to the rules, which are governed by the Exchange Commission in the United States. There is no particular format of the income statement that must be adhered to under the IFRS; however, GAAP has a specific format set up.

IFRS are accounting standards that display the events and transactions, such as revenue, finance cost, tax expense, and profit loss for reporting purposes. The two methods of income are different when it comes to the statement of financial position, statement of changes in equity, and statement of cash flows.