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GAAP vs. IFRS: Liabilities definitions Flashcards

GAAP vs. IFRS: Liabilities definitions
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  • GAAP
    U.S. accounting framework established by the Financial Accounting Standards Board, guiding financial reporting and liability presentation.
  • IFRS
    International accounting standards set by the International Accounting Standards Board, used globally for financial reporting.
  • Liability
    Obligation representing a future outflow of resources, typically listed by liquidity on financial statements.
  • Financial Accounting Standards Board
    U.S. organization responsible for developing and issuing generally accepted accounting principles.
  • International Accounting Standards Board
    Global body that creates and maintains international financial reporting standards.
  • Bonds Payable
    Long-term debt instruments requiring periodic interest payments and eventual repayment of principal.
  • Effective Interest Method
    Technique for amortizing bond premiums or discounts, ensuring interest expense reflects carrying value over time.
  • Convertible Bonds
    Debt securities that can be exchanged for shares of stock, initially recorded as liabilities.
  • Equity
    Ownership interest in a company, often resulting from conversion of certain debt instruments like convertible bonds.
  • Working Capital
    Difference between current assets and current liabilities, indicating short-term financial health.
  • Statement of Financial Position
    IFRS term for the balance sheet, displaying assets, liabilities, and equity at a specific point in time.
  • Balance Sheet
    Financial statement showing a company's assets, liabilities, and equity, known as the statement of financial position under IFRS.
  • Liquidity
    Order in which assets or liabilities are presented, based on how quickly they can be converted to cash or settled.
  • Current Assets
    Resources expected to be converted to cash or used up within one year, crucial for working capital calculation.
  • Current Liabilities
    Obligations due within one year, subtracted from current assets to determine working capital.