Accounting Best Practices with Steve Bragg ABP #371 - The Differences Between US GAAP and UK GAAP
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Jan 9, 2025 Dive into the intriguing world of accounting as the discussion unveils the key differences between U.S. and U.K. GAAP. Discover how asset revaluation policies differ across the two systems and why UK GAAP offers more flexibility than its U.S. counterpart. Learn about unique practices in capitalization and how intangible assets are treated differently. The episode highlights the rigorous standards of U.S. GAAP, making this comparison a must-listen for accounting enthusiasts!
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Asset Revaluation Differences
- UK GAAP follows IFRS and allows asset revaluation to current market values, unlike US GAAP which generally prohibits it for fixed assets.
- This revaluation is optional under UK GAAP and usually requires more accounting work, so it's often advised against.
Avoid Unnecessary Asset Revaluation
- Avoid revaluing assets under UK GAAP unless necessary because it requires additional accounting work.
- Asset revaluation is optional; choose the simpler approach to reduce complexity.
Interest Cost Capitalization Options
- US GAAP mandates capitalization of interest costs on construction projects, while UK GAAP allows either capitalization or expensing.
- UK GAAP’s option to expense interest simplifies accounting work compared to US GAAP.
