Final answer:
The IFRS balance sheet focuses on liquidity, listing assets by ease of conversion into cash, while US GAAP prioritizes the permanence or longevity of assets. A T-account highlights this by showing assets equaling liabilities plus net worth, an essential concept in accounting, particularly for financial entities like banks.
Step-by-step explanation:
The IFRS balance sheet emphasizes liquidity whereas the US GAAP balance sheet emphasizes order of permanence. The IFRS format lists assets starting with the most liquid—for example, cash and cash equivalents—while the more permanent assets, like property and equipment, are listed later. Conversely, the US GAAP format often arranges assets by the duration of their existence; fixed or long-term assets are typically presented before current, more liquid assets.
A T-account is foundational in accounting education for illustrating the structure of a balance sheet. The 'T' shape separates assets on the left from liabilities on the right, corresponding to the equation where assets always equal liabilities plus net worth.
For banks, this format delineates how assets—like loans made or securities held—balance against liabilities, such as customer deposits, with net worth settling the equation so that everything balances to zero.