As to the matters dealing with construction contracts, IFRS applies to the fixed-price and cost-plus constructions of interdependent or interrelated contracts in terms of design, technology and function while the GAAP applies to performance contracts where the customer has given his specifications about the services to be provided thereby limiting its scope of application to only certain industries and types of contracts.
On the other hand, the completed-contract method is totally prohibited in the IFRS principals while in the US GAAP standards, the method can only be used in a few selected situations as in the contracts where the estimates cannot be measured reliably. However, when the contract cannot be measured reliably but there is an assurance of no losses in the contract, the percentage of completion method is viable in GAAP standards where the revenues or the gross profit approach are used unlike IFRS which uses only the revenue approach to determine the completion percentage of the contract (pwc, 2009).
Although both principals are applicable in batter transactions, the US sGAAP requires the use of fair value of goods or services surrendered while the IFRS uses the fair value of goods or services received as starting point to measure a batter transaction. However, in accounting for the advertising barter transactions, if the fair value of assets surrendered is not determinable according to US GAAP, the transaction should be recorded on basis of carrying amount of advertising surrendered.
While according to IFRS, the transactions revenue cannot be measure reliably at fair value of advertising services received (pwc, 2009). On the other hand, when accounting for barter-credit transactions the IFRS has no guidance for such transactions while in the US GAAP, it is presumed that the fair value of the nonmonetary asset exchanged gives evidence of the barter credit received.
In fact there are many of these conceptual framework differences that will vary depending on the individual company’s factors as operational nature, industry in which an entity operates and the accounting policies applicable (McCann, 2009). To narrow down the literature on the differences, here is a tabular list that shows the impacts of IFRS and US GAAP in both measures and disclosures on the following areas: