Final answer:
The statement is true; U.S. GAAP and IFRS have similar approaches to accounting for taxation, but they still result in different reported amounts for deferred taxes due to specific rules and applications regarding the recognition, measurement, and presentation of deferred tax liabilities and assets.
Step-by-step explanation:
The statement that differences in reported amounts for deferred taxes are among the most frequent when comparing U.S. GAAP and IFRS is true. While both U.S. GAAP and IFRS use similar approaches to account for taxation, the specific rules and applications can result in different reported amounts for deferred taxes. These differences affect how companies recognize, measure, and present deferred tax liabilities and assets on their financial statements.
For example, under IFRS, deferred tax liabilities and assets must be recognized for all temporary differences, with certain limited exceptions. In contrast, U.S. GAAP allows for more exceptions and does not require recognition of deferred tax liabilities for certain differences related to investments in subsidiaries and associates.
Furthermore, the assessment of a valuation allowance against deferred tax assets under U.S. GAAP can be more likely than under IFRS, potentially leading to different net deferred tax assets reported.
These differences can have a significant impact on the financial reporting of companies, and they show the importance of understanding the nuances between the two accounting frameworks.