In this report, we will discuss the significant difference between US GAAP and IFRS and their influence on Canadian businesses. Canada adopted IFRS in 2011, while the United States still uses GAAP as its primary accounting regulation. Due to the close economic ties and geographic proximity between the two countries, the difference between rules-based U.S. GAAP and principles-based IFRS will have a significant impact on Canadian companies that operate largely in the United States. -United, merge with American companies and are listed on the Stock Exchange. the American stock market. This report will also focus on the key differences regarding inventory that occur when comparing IFRS and US GAAP. The three major differences include costing methods, valuation and reversal of depreciation. (Earnst and Young, 2011) These three differences have posed challenges for many Canadian companies that operate largely in the United States, are listed on the New York Stock Exchange, and are considering merging with an American company. Finally, this article will explore the issues that Canada faces due to the conversion from GAAP to IFRS in accounting for property, plant and equipment. Under IFRS, IAS 16, Property, Plant and Equipment, deals with the accounting for fixed assets. This recommends treating the components of installations and equipment separately if their cost is significant in relation to the total cost of the asset. Whereas US GAAP rarely uses this componentization technique. The approach used by IFRS is more practical than that used by U.S. GAAP. LITERATURE REVIEW Since Canada adopted IFRS in 2011, the number of Canadian cross-listed companies reporting under U.S. GAAP United has almost doubled. (Brian et al., 2013) The reason for this is partly because of the conversion...... middle of paper ...... Major differences include costing methods, valuation and reversal of depreciation. Until the United States adopts IFRS guidelines, it will remain difficult for those comparing Canadian and American companies due to differences in the application of the rules. Concluding our discussion, we can say that IFRS specifically addresses the “component approach” in which assets are divided into components when their costs are significant in relation to the total cost of the asset; whereas US GAAP does not apply this approach in practice. This may result in various tax and compliance implications. However, the treatment suggested by “IAS - 16: Property, plant and equipment” is also quite practical and logical. The company, if it divides its assets into components based on the cost of those assets, will present the financial information more accurately..