The IFRS is the international financial reporting standard designed as a common global language for business affairs so that companies can understand their accounts and compare them across international borders. They are the result of the increase in international shareholding and trade is very important for companies dealing with other countries. Progressively, they replaced many different national accounting standards. These standards are developed by the International Accounting Standards Board, known as the IASB, which is an independent accounting standard-setting body. It is based in London and is made up of 15 members. The IASB began its operations in 2001 along with the establishment of the International Accounting Standards Committee as it is largely funded by contributions from large accounting firms, private financial institutions and industrial banks, central and development banks and other professional and international organizations in the world . These standards are aggressively becoming the global standard for public companies preparing financial statements. When comparing IFRS and US GAAP, there are some key differences that they should be aware of. The big difference is that IFRS seems to provide less general detail about things. They also provide very little instruction regarding the industry. Although the differences between IFRS and US GAAP have narrowed, some differences still exist. Some other differences are that IFRS uses a one-step method for impairment losses rather than the two-step method used by U.S. GAAP. This makes write-downs more likely in a company. Debts for which a breach of covenant has occurred are also not permitted and must be classified as non-current unless a waiver is obtained prior to the balance sheet date. Another difference is that IFRS does not allow LIFO. Topic 1: Inventory Inventories are considered assets. These assets are held for sale in the business. They are also held for sale in the sales manufacturing process or in the form of materials and even supplies to be consumed in production. It is also used in the interpretation of services. Under IFRS, the use of LIFO cannot be used when subject to US GAAP. Businesses can choose between LIFO and FIFO. Furthermore, if inventory is written down under IFRS, this write-down may possibly be reversed in the future if certain criteria have been met. Under US GAAP, write-offs are limited. It may not be a significant difference, but it does have an impact on the balance sheet.