IFRS and US‐GAAP comparability before release No. 33‐8879

Chunhui Liu (Department of Business and Administration, University of Winnipeg, Winnipeg, Canada)

International Journal of Accounting & Information Management

ISSN: 1834-7649

Publication date: 1 March 2011



The purpose of this paper is to investigate whether reported net income as per US‐generally accepted accounting principles (US‐GAAP) has become comparable to net income as per International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board right before the removal of the US‐GAAP reconciliation requirement and what major accounting elements have caused the differences, if any.


Using Gray's index of comparability suggested by Haverty, the paper compares the reported net income under IFRS for a sample of US‐listed Chinese companies using IFRS with the reconciled net income under US‐GAAP.


Consistent with Haverty is the finding that net income under IFRS is still not completely comparable to net income under US‐GAAP for the same company and that the adjustment for tangible assets revaluation is a major contributor to the difference. In addition, different treatment of business acquisition is found to be another major cause of the incomparability. The comparability has improved at 10 percent threshold since Haverty's study.


This paper provides an update on the status of IFRS and US‐GAAP comparability and highlights an additional major area to work on towards improved comparability.



Liu, C. (2011), "IFRS and US‐GAAP comparability before release No. 33‐8879", International Journal of Accounting & Information Management, Vol. 19 No. 1, pp. 24-33. https://doi.org/10.1108/18347641111105917

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