Differences and Similarities in Accounting between the USA and Saudi Arabia: (GAAP) VS. (IFRS)

Abstract

Corporations across the globe are currently operating under different accounting standards. International businesses are continuing to grow, and if the corporations could agree on one accounting system, it could improve efficiency in trade, investments, and tax rules. This paper is going to compare and contrast the accounting standards in Saudi Arabia (IFRS) and The United States of America (GAAP), and conclude that it would be beneficial for all businesses to operate under IFRS. Many companies in the United States are beginning to use IFRS as an alternate to GAAP, but a full transition would be very expensive and time consuming, leading to the hesitation of some companies. The study incorporates the difference in the valuation of stock by various methods and also involves the advantages and disadvantages of each method. On the basis of various evaluations and comparison between both the methods the study concludes that that IFRS has more benefits and is the preferred method for the future.