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What is the difference between IFRS vs GAAP cost of goods sold acounting?


Check out companies like dialog semiconductor.
Their margins are half of their US competitiors (even though they use the same manufacturing flow and customer base).

asked Apr 22, 2013 in General Accounting Discussion by anonymous
retagged Apr 23, 2013 by Visio

1 Answer

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Neither IFRS nor US GAAP specifies the margin that a company should maintain. It is up to the management of the company to decide. Both IFRS & US GAAP requires the use of accrual method of accounting which is essentially derived from the matching principle. That means if you recognize some revenue you have to recognize the corresponding expenses also regardless of the time of cash outflow.
answered Apr 23, 2013 by JaneM Level 2 Member (4,320 points)

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