In this paper we discuss the challenges of teaching U.S. GAAP and IFRS side by side. We then focus on one particular challenge of teaching both the more detailed U.S. standards and the less specific IFRS: the likelihood that students will “anchor” on the precise rules in U.S. GAAP when applying the less specific guidelines under IFRS. As a part of this discussion, we report on a classroom experiment designed to test for the presence of anchoring on U.S. GAAP rules when applying IFRS in a lease classification task. Our results indicate that students do anchor on the U.S. GAAP bright-line values for lease accounting when classifying leases under IFRS, primarily when U.S. GAAP rules provide an acceptable quantification of IFRS' less precise guidelines. We do not find that teaching order (i.e., teaching U.S. GAAP first versus IFRS first) directly affects anchoring or lease classification. However, a moderation analysis suggests the interaction between teaching order and anchoring may affect lease classification. Our results suggest that, where possible, instructors may wish to teach principles-based accounting prior to rules-based accounting to mitigate potential anchoring by students and its effect on their accounting judgments.

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