Differences Between U.S. GAAP and IFRS in Accounting for Goodwill Impairment and Inventory: Tax Treatment Under the Internal Revenue Code

Abstract

This paper examines how to account for goodwill impairment and inventory under the Financial Accounting Standard Board’s (FASB) U.S. Generally Accepted Accounting Principles (GAAP), International Financial Reporting Standards (IFRS), and the Internal Revenue Code (IRC). Although U.S. GAAP and IFRS accounting standards share some similarities, there are still some key fundamental differences between the two standards. This paper will also detail the treatment of these items by the IRC and how taxation may share some similarities and differences to its financial reporting counterpart.