The backbone of all businesses is finance and accounting and for it to succeed, financial and accounts management is of paramount importance. As such, an issue that multinationals and businesses were facing was the preparing financial statements of various regions which are relevant, comparable, reliable and transparent in order to effectively manage accounting operations. In overcoming this obstacle, accounting bodies were therefore set up in various countries for purposes of managing financial statements and accounting operations.
Generally, different countries have got their own bodies of accounting where accounting standards are designed in accordance with the country laws and particular requirements. In the US for example, the GAAP are the applicable laws. GAAP refers to a set of accounting standards which define procedures and offer guidelines set by the professional accounting organizations which are used in preparing a company’s financial statements. AASB on the other hand is a Government company in Australia which is tasked with the responsibility of issuing, developing and maintaining accounting standards in accordance with the Australian law.
While the role of GAAP and ASSB is bringing accounting operations effectiveness so that relevant and reliable financial statements can become availed to stakeholders, they are not similar. Below are some of the differences:

Main Differences

i) Preparation of financial statements
For GAAP, financial statements are prepared comparatively even though there are certain circumstances where financial statements are prepared on a single period. Public companies must follow the SEC defined rules whereby a balance sheet of the latest two years needs to be prepared while other financial statements need to be based on three year period which ends on the date of the balance sheet.
AASB on the other hand requires that an organization present comparative information for every amount reported in the financial statements of the present year except when the standard otherwise allows.

ii) Financial reports layout
There are no particular GAAP requirements to follow a defined financial statements layout; however, public companies are expected to follow the S-X regulation requirements.
While AASB does not also follow a particular layout, there is a defined list of minimum line items which the financial statements should include and are not as dictatorial in comparison to Regulation S-X.

iii) Disclosure of measures of financial performance
Companies do not have to address disclosures and presentation of measures of financial performance under GAAP. Nevertheless, there are particular SEC regulations which require presentation of certain headings. On the other hand, financial reports of public companies do not allow presentation of non-GAAP measures.
AASB permits measures of financial performance presentation in the statement of comprehensive income if that information relates to the company’s financial performance understanding

iv) Model of consolidation
GAAP puts emphasis in the control of financial interest where every entity is a VIE. In case an entity is not a VIE, the controlling power is normally assessed through voting rights.
AASB on the other hand puts emphasis on the controlling power. Control exists in case the investor has got power over the investee and when he is able to control the investee in order to affect the return of the investor.

v) Costing Method
The Last in Last out (LIFO) stock costing method is acceptable even if there is no clear cut need of using a consistent formula for inventories of similar nature.
AASB on the other hand does not accept the LIFO costing method. The allowed costing method instead is determined by using the retail industry or standard costing method.

vi) Investment Property
The Investment property whether held for use or for sale under GAAP is not addressed separately.
According to AASB 140, investment property is accounted separately and is normally recognized as an asset in case future economic benefits accrue to the organization and the property’s cost can be measured reliably.

vii) Revaluation
Under GAAP, there is no revaluation allowed. However, AASB 1041 allows revaluation of intangible assets. The standard however is not applicable to Goodwill.