Which financial reporting standards are recognized globally alongside US GAAP?

The correct answer, International Financial Reporting Standards (IFRS), is recognized globally as a comprehensive set of accounting standards for financial reporting that is used by companies in many countries around the world. IFRS is developed and maintained by the International Accounting Standards Board (IASB) and aims to provide a common accounting language to enhance the transparency and comparability of financial statements across international borders.

This standard differs from US GAAP (Generally Accepted Accounting Principles), which is the accounting framework used in the United States, but both are essential in the global financial landscape. The presence of IFRS alongside US GAAP allows multinational companies to prepare their financial statements in a streamlined manner, facilitating international investments and financial analysis.

In contrast, the other choices do not represent widely accepted or recognized accounting frameworks. General Accounting Principles (GAP) and Corporate Financial Reporting Standards (CFRS) are not established standards and do not provide a unified approach to accounting. Similarly, International Accounting Guidelines (IAG) lacks relevance and recognition in the context of formal financial reporting standards. Understanding the distinction between IFRS and other options helps clarify the landscape of global accounting standards.