Ethical Obligations and Decision-Making in Accounting 2nd Edition by Steven Mintz, Roselyn Morris

Exercise 17

Full-IFRS and IFRS for SMEs do not permit recognition on the income statement of extraordinary items. What are the rules in the U.S. for extraordinary items? Evaluate the pros and cons of recognizing them separately on the income statement as opposed to combining them into another category.

Step 1 of 2

Accounting rules:

Accounting rules are defined as a statement which provides guidelines to record the accounting transaction.

IFRS:

IFRS stands for international financial reporting standards. It is developed by the IASB (International accounting system board) for the preparation of the balance sheet and other profitability statements.

GAAP:

GAAP stands for generally accepted accounting principles. It is the set of accounting principles and standards. It was issued in 1973 for US public and private companies by the financial accounting standard board for issuing a public statement.

It is the set of accounting guidelines lines and rules used by the companies for financial reporting.