| Course | ACC-6010 Intermediate Accounting III |
|---|---|
| Module | Module 9 |
| Paper type | Written Assignment 9: short paper on international accounting standards |
| Length | About 745 words, 5 pages |
| Format | APA 7 student paper |
| School | Thomas Edison State University |
| Program | M.S. in Management in Accounting |
| Updated | October 2026 |
Free sample paper for ACC 6010 Module 9
Close but Not Converged: The Remaining Gaps Between U.S. GAAP and IFRS and Why They Persist
Student Name
M.S. in Management in Accounting, Thomas Edison State University
ACC-6010: Intermediate Accounting III
Mentor Name
Month Day, Year
Close but Not Converged: The Remaining Gaps Between U.S. GAAP and IFRS and Why They Persist
Introduction
For two decades, the FASB and the IASB worked to bring their standards together. The revenue standards of 2014 and the lease standards of 2016 were products of that effort, and many companies now find the two frameworks close enough that differences seem minor. Yet the United States has not adopted IFRS, and the boards no longer pursue a single set of standards. This paper explains why, which differences remain important and what they mean for a company like Palisades.
How Convergence Advanced and Stalled
The Norwalk Agreement of 2002 committed the boards to make their standards compatible. From 2007, overseas companies listed in the United States could submit IFRS accounts with no reconciliation to U.S. GAAP, a major step (Securities and Exchange Commission [SEC], 2007). The SEC then considered allowing or requiring U.S. companies to use IFRS, but its staff's 2012 final report raised concerns about the IASB's funding and governance, the cost of conversion and the loss of U.S. influence over standards, and no decision to adopt followed. The boards completed joint projects on revenue and leases but diverged on financial instrument impairment and on lease accounting for lessees. Today each board sets its own agenda.
Six Differences That Still Change the Numbers
The last difference is new. IFRS 18, issued in 2024 and effective in 2027, requires companies to classify income and expenses into operating, investing and financing categories, present defined subtotals such as operating profit and disclose management-defined performance measures in the notes (International Accounting Standards Board [IASB], 2024). U.S. GAAP has no equivalent requirement, so income statement formats will diverge further just as other differences narrowed.
| Area | U.S. GAAP | IFRS | Effect |
|---|---|---|---|
| Inventory cost flow | LIFO permitted | LIFO prohibited | Higher inventory and income under IFRS when prices rise |
| Impairment reversals | Prohibited for long-lived assets held and used | Required when value recovers, except goodwill | Income can recover under IFRS |
| Development costs | Generally expensed | Capitalized when technical and commercial feasibility criteria are met | Higher assets and earlier income under IFRS |
| Property, plant and equipment | Historical cost | Cost or revaluation model; component depreciation required | Asset values and depreciation can differ |
| Lessee accounting | Finance and operating leases | Single model | Higher EBITDA under IFRS |
| Income statement subtotals | Few required subtotals | IFRS 18 requires operating profit and defined categories from 2027 | More standardized IFRS income statements |
What Research Says About IFRS Adoption
Evidence on IFRS adoption is mixed but informative. Barth et al. (2008) found that firms in 21 countries that voluntarily adopted international standards showed less earnings smoothing, less management of earnings toward targets, more timely loss recognition and higher value relevance than comparable firms using local standards, consistent with higher accounting quality. Daske et al. (2008) studied the 2005 mandatory adoptions and found increases in market liquidity and, on average, modest decreases in the cost of capital, but only in countries with strong enforcement and incentives for transparent reporting. The lesson is that standards alone do not produce quality; enforcement and firms' incentives matter as much, which is one reason U.S. regulators were slow to see a large benefit from switching.
What the Differences Mean for Palisades
Palisades owns a German subsidiary, Palisades Optik GmbH, which reports locally under IFRS. Consolidating it requires converting its statements to U.S. GAAP. Three adjustments are typical. Optik capitalized €400,000 of development costs for a new lens coating under IAS 38, which must be expensed under U.S. GAAP. Optik reversed a prior impairment on a production line when demand recovered, which U.S. GAAP does not allow for assets held and used. And Optik's leases are all on its balance sheet with depreciation and interest, while some would be operating leases with a single cost under U.S. GAAP. Each adjustment needs tracking from year to year, and Palisades' auditors will test the conversion. If Palisades ever listed shares in Europe or acquired an IFRS reporter, these differences would also shape how investors compared it with peers.
Conclusion
U.S. GAAP and IFRS share most principles and several major standards, but convergence has given way to coexistence. Differences in inventory, impairment, development costs, asset measurement, leases and now income statement structure still change reported numbers. Research suggests that the quality of reporting depends on enforcement as much as on the standards. For companies such as Palisades with operations under both frameworks, the practical task is a careful, documented conversion each year (Kieso et al., 2012).
References
Barth, M. E., Landsman, W. R., & Lang, M. H. (2008). International accounting standards and accounting quality. Journal of Accounting Research, 46(3), 467-498. https://doi.org/10.1111/j.1475-679X.2008.00287.x
Daske, H., Hail, L., Leuz, C., & Verdi, R. (2008). Mandatory IFRS reporting around the world: Early evidence on the economic consequences. Journal of Accounting Research, 46(5), 1085-1142. https://doi.org/10.1111/j.1475-679X.2008.00306.x
International Accounting Standards Board. (2024). IFRS 18 presentation and disclosure in financial statements. IFRS Foundation.
Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2012). Intermediate accounting (14th ed.). John Wiley & Sons.
Securities and Exchange Commission. (2007). Acceptance from foreign private issuers of financial statements prepared in accordance with International Financial Reporting Standards without reconciliation to U.S. GAAP (Release No. 33-8879).
Reading the ACC 6010 Module 9 assignment instructions
The ninth ACC-6010 written assignment, part of the 60 percent the nine assignments carry together, is the one the syllabus describes as a short paper rather than exercises and problems. It belongs to Module 9, international accounting standards. Prompts typically ask you to discuss the convergence of U.S. GAAP and IFRS, the major remaining differences and their effects on financial statements, the consequences of IFRS adoption or the case for and against U.S. adoption. Because Kieso's 14th edition was written in 2012, while convergence was still a live question, check current developments such as IFRS 18 and the boards' recent agendas before you write. This sample makes a single argument and supports it.
How this ACC 6010 Module 9 example is built
The paper opens by stating its thesis: the frameworks are close but no longer converging. A history section explains the key steps, from the 2002 agreement and the 2007 SEC decision to the 2012 staff report, and why convergence stalled. A table sets out six differences beside their effects on the statements, including the new IFRS 18 subtotals. A research section summarizes two major studies and draws the lesson that enforcement matters as much as standards. An application section converts three items for a German subsidiary of the invented company, and the conclusion restates the argument and its practical implication. Each difference is tied to a figure in the optics maker's statements.
ACC 6010 Module 9 rubric: what earns full marks
The short IFRS paper is scored on the written assignment rubric within the same 60 percent. Mentors look for an accurate account of convergence history, differences described correctly and current, effects on the statements explained rather than rules listed, research used to support claims and a clear argument. Applying the differences to a company shows understanding beyond memorization. Currency matters on this topic, since outdated claims about imminent U.S. adoption or superseded standards cost points. Clear organization, plain writing and APA citations complete the expectations. Specific examples of numbers that change, rather than general statements about principles and rules, are what earn credit for analysis. Tying each difference to a figure in the company's statements turns a list into analysis.
ACC 6010 Module 9 help: mistakes that cost marks
Short papers on international standards often read like a list of differences copied from a summary chart. Choose the differences that change numbers and explain how. Check that each difference is still current, since joint projects removed some and IFRS 18 added others. Avoid claiming that the United States plans to adopt IFRS; say what the SEC actually did. Use research to support any claim about the effects of adoption, and note its limits. Tie the discussion to a company or a situation. A free first sample of your own ACC-6010 Module 9 paper is available on request.
Write yours, or have the desk draft it
This paper is an original model document written by our desk, not a submitted student paper and not an official Thomas Edison State University document. Read it for the moves, then write your own to the instructions in your classroom. If you want one built to your exact prompt and rubric, the first custom sample is free and arrives in 24 to 48 hours.
More ACC 6010 and M.S. in Management in Accounting sample papers
- ACC 6010 Module 1: Investments Written Assignment With IFRS Application
- ACC 6010 Module 2: Revenue Recognition Written Assignment With IFRS 15
- ACC 6010 Module 3: Income Taxes Written Assignment With IAS 12
- ACC 6010 Module 4: Pensions Written Assignment With IAS 19
- ACC 6010 Module 5: Leases Written Assignment: Lessor and Lessee, IFRS 16
- ACC 6010 Module 6: Accounting Changes and Error Analysis Assignment
- ACC 6010 Module 7: Statement of Cash Flows Written Assignment With IAS 7
- ACC 6010 Module 8: Final Project: Comprehensive Income and Reporting Quality
- ACC 6030 Module 7: Written Assignment: Balance Sheet and Cash Flow Theory
- ACC 6020 Module 1: Business Combinations Written Assignment
ACC 6010 Module 9 questions, answered
Where can I find a free ACC 6010 Module 9 sample paper?
The ACC-6010 short paper on international standards is printed above: convergence history, six remaining differences, research on IFRS adoption and an application to a German subsidiary.
Has the United States adopted IFRS?
Not for domestic companies. Foreign companies listed in the U.S. may file IFRS accounts without reconciling them, but U.S. companies continue to report under U.S. GAAP.
What are the main differences between U.S. GAAP and IFRS?
Key differences include LIFO, impairment reversals, development cost capitalization, the revaluation model for property, lessee accounting and, from 2027, IFRS 18's income statement categories.
What is IFRS 18?
A 2024 IASB standard, effective in 2027, that requires operating, investing and financing categories in the income statement, defined subtotals and disclosure of management-defined performance measures.
Did IFRS adoption improve accounting quality?
Studies found improvements in quality, liquidity and cost of capital for some adopters, mainly where enforcement and reporting incentives were strong.