In this report, we will discuss the significant difference between US GAAP and IFRS and its influence on Canadian companies. Canada adopted IFRS in 2011 while the United States still uses GAAP as its primary accounting standard. 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 an overwhelming influence on Canadian companies that largely operate in the United States, merge with US companies and are publicly traded. the US stock exchange. This report will also focus on the key differences regarding inventory that occur when comparing IFRS and US GAAP. The three main differences include costing, valuation, and write-off methods. (Earnst and Young, 2011) These three differences have caused challenges for many Canadian companies that operate largely in the United States, are listed on the New York Stock Exchange, and are seeking to merge with an American company. Finally, this paper will explore the issues Canada faces with the conversion from GAAP to IFRS in property, plant and equipment accounting. Under IFRS, IAS 16, Property, Plant and Equipment deals with the accounting of fixed assets. This recommends treating plant and machinery components separately if their cost is significant compared to the total cost of the asset. While US GAAP rarely uses this componentization technique. The approach used by IFRS is more workable than US GAAP. LITERATURE REVIEW Since Canada adopted IFRS in 2011, the number of inter-listed Canadian companies reporting under U.S. GAAP has nearly doubled. (Brian et al., 2013) The reason for this is partly due to the conversion...... half of the document... and the main differences include methods of costing, valuation and write-off of depreciations. Until the United States transitions to IFRS guidelines, it will be 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 deals with the "Componentization Approach" in which goods are divided into components when their costs are significant compared to the total cost of the good; while US GAAP does not apply this approach in practice. This can lead to various tax and compliance implications. However, the treatment suggested by “IAS - 16: Property, Plant and Equipment” is also quite practical and logical. The company separately if it divides its assets into components based on the cost of those assets will present financial information more accurately.