As a generalized statement regarding lease accounting, which statement best describes U.S.versus international accounting principles?
A)IFRS for leases are more principles-based than GAAP.
B)IFRS for leases are more rules-based than GAAP.
C)IFRS and GAAP are similarly rules-based.
D)IFRS and GAAP are similarly principles-based.

Question

Quizplus · Accepted Answer

IFRS for leases are more principles-based than GAAP. This means that IFRS standards provide more general guidance and allow for more judgment in application, while GAAP standards are more specific and rule-based. For example, under IFRS, the lessee may need to evaluate the substance of the lease to determine if it is a lease, whereas under GAAP, if certain criteria are met, the arrangement is deemed a lease.

As a Generalized Statement Regarding Lease Accounting, Which Statement Best