The scope of the specific distinctions between IFRS and GAAP has been decreasing as a result of ongoing convergence projects between the IASB and the FASB. But, there are still some important variances, and depending on the sector a firm operates in as well as specific facts and circumstances, any one of these could lead to considerably different reported results. For instance, IFRS prohibits Last In, First Out (LIFO).
Why IFRS requires capitalization of development expenditures after specific qualifying criteria are met, whereas U.S. GAAP uses a two-step procedure for impairment write-downs, increasing the likelihood of write-downs. U.S. GAAP normally requires development costs to be written off as they are incurred, with the exception of costs associated with the creation of computer software, which must be capitalized after certain conditions are met.