IASB and FASB Convergence to develop IFRS: An Overview
The USA exercises great influence on the existing accounting standards all over the world. The USA espouses the Financial Accounting Standards Board (FASB), which has set forth many standards that are applied by the international accounting standards boards. On the other hand, the rest of the countries of the world follow the International Accounting Standards Board (IASB), which is designed to realize convergence in accounting standards globally (IASB international, 2010) to develop International Financial Reporting Standards.
In 2001, an outline was approved by the IASB to offer direction in creating accounting standards. The outline has 4 main objectives, namely 1) defining the aims and objectives of financial statements 2) identification of features that create useful information 3) explaining the basic facts of financial statements and 4) and offering theories of capital maintenance.
The objectives of financial statements are to offer data on financial position, variations in financial position, and the organization’s financial outlook (The IASB framework, 2008).
The outline keeps two key presumptions regarding International Financial Reporting Standards (IFRS). Firstly, it is the on accrual basis, which considers that a transaction would be documented when it happened, not when the cash from that transaction is obtained. Secondly, it presumes that a company or business organization would sustain in the near future.
For several years, many countries of the world have had its own set of accounting standards and norms; nevertheless, in view of the fact many organizations turned global, the workload to report financial statements increased significantly. Not on...
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...t the FASB and the IASB converge on standards that would be best fit for the US economy as well the companies.
Indeed, the IASB has some accounting aspects in common with FASB; nevertheless, there exist more dissimilarities than similarities. GAAP and IFRS both offer remarkable accounting principles; nevertheless, the USA should continue to follow GAAP and continue to have GAAP created by the FASB.
The US companies are not expected to fully approve IFRS or the IASB, since it eliminates their control over financial standards globally and IFRS has the accounting standards that are quite different from the US standards upon which many decisions in the country have been made. Though, the SEC try to converge both the Boards and the concepts, the disparities between the two imply that it may take few years to set up a standard accounting Board that the USA would approve.
In this essay, the author
Explains that both fasb and iasb concurred to integrate their projects in terms of revenue, expenses, gains, and loss accounts.
Describes the insignificant and key differences between fasb and iasb.
Explains that the fasb was created by the usa in 1973, and the iasb in the uk in 2001.
Explains that the fasb replaced the accounting principles board (apb) and the committee on accounting procedure (cap), while the iasb substituted the international accounting standards committee (iasc).
Explains the fasb is a non-profit accounting body that creates gaap, while the iasb develops ifrs.
Explains that while gaap offers the contemporary companies an option between whether to conclude contracts in cash or shares, ifrs necessitates them to deal businesses in shares only.
Explains that ifrs and gaap explain equity and debt, while a fixed derivative should be detached at the conclusion of each reporting time.
Explains that gaap necessitates non-current display of defaulted debt if a waiver is accepted prior to the payment issue date, while ifrs needs this following the balance sheet dates.
Explains that gaap permits convertible debt to be registered as long-term debt, while ifrs lists convertible bonds discretely into the equity part and the debt section.
Explains that the iasb groups all assets in relation to their cash flows, while the fasb needs everything to be assessed at the fair value.
Explains that the usa has great influence on accounting standards all over the world, and the rest of the countries follow the international accounting standards board (iasb) to develop international financial reporting standards.
Explains that financial statements offer data on financial position, variations in financial positions, and the organization's financial outlook.
Explains that the usa does not recognize ifrs or iasb, though the securities and exchange commission (sec) put forward a suggestion.
Compares gaap and ifrs in the way they identify stock-based reimbursement. the iasb published the specific accounting norms in may 2002.
Explains that the present accounting standards impact the manner in which people carry out their businesses and plan for the reimbursement of taxes.
Explains that the fasb and the iasb signed the norwalk agreement in 2002 to develop a high quality, converging set of accounting standards. the u.s. securities and exchange commission has slowed down in its advancement towards ifrs.
Explains that there are conflicting views regarding the issue of global financial reporting standards.
Opines that the us should continue to follow gaap and ifrs, since it eliminates their control over financial standards globally.
There are a number of differences between the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB). The IASB consists of 16 members with 3 part time members. The FASB consists of 5 members with no part time members. The members of the IASB board consist of 4 from Asia, 4 from Europe, 4 from North America, 1from Africa, 1 from South America, with 2 from any region in the world. This board is diversified with its members being knowledgeable in the varying fields of accounting such as the academic world, as well as those who utilize, prepare, and audit financial records. The FASB on the other hand requires that its board members be involved as a watchdog for the public. The FASB is a geographically diverse board with members who are knowledgeable in the fields of business, as well as accounting and it’s required reporting. Therefore the FASB board is made up of members from universities, corporations, accounting firms, as well as investors.
In this essay, the author
Explains choi, frederick d. s., and gary k. meek. international accounting. 7th ed. boston: prentice hall, 2011.
Compares the iasb and the financial accounting standards board (fasb).
Explains why other organizations pay close attention to the convergence of ifrs and u.s. gaap, and the influence that they have globally in national accounting standards.
Explains that u.s. accountants, analysts, and others involved in financial reporting need to know about ifrs.
Opines that neither the iasb nor the fasb will simply vanish, nor do they see it as the accepted standard around the world.
I think that it would be beneficial for United States to switch to IFRS, but I think that SEC should not vote to switching to IFRS after companies spend millions of dollars on converting from GAAP (Maryland).
In this essay, the author
Explains that changes in ifrs will affect some slight modifications to significant amendments of principles. it can affect different areas of financial statements and information.
Opines that it would be beneficial for the united states to switch to ifrs, but that the sec should not vote to switching after companies spend millions of dollars on converting from gaap.
Explains that the european union has already switched to irfss — it happened the same year when united states companies had deadline to switch over.
Opines that switching to ifrs will help not only companies but also investors and public to compare financial statements.
Explains that the united states uses the customary system instead of the metric system.
Explains that switching to ifrs from gaap will allow us to become a part of the global economy.
Opines that the conversion to ifrs will be beneficial for united states companies, but it also has some disadvantages for the country.
Explains that the first reason for disagreement for switching to ifrs is the inconsistence in the evaluation of financial standards.
Explains that unlike gaap, there is not lot enforcement with ifrs. the securities and exchange commission controls the accounting rules.
Explains that international organizations do not have global organization such as sec who is watches over the international standards. this inconsistence can cost fraud problem in financial statements.
Explains that the financial reporting council of nigeria (frc) advised more organizations in the country to adopt ifrs to boost their development and attract foreign direct investment (fdi).
Explains that nigerian companies have raised capital from international stock markets and some others have established significant presence in other jurisdictions.
Opines that financial statements prepared in nigeria use global financial reporting benchmarks to better understand the risk and consequences of economic capital flows.
Opines that the ifrs does not make it complex for investors and other users of financial information to understand accounting statements.
Opines that the united states should convert to ifrs because it will be more beneficial to them than otherwise.
Cites albrecht, d., pricewaterhousecoopers, and gill l. on ifrs: coming to america.
The FASB Codification will supersede all then-existing non-SEC accounting and reporting standards form on governmental entities. All other non-grandfathered, non-SEC accounting literature not included in the Codification will become non-authoritative.
In this essay, the author
Describes the information they learned in the document, their book, and through internet research.
Describes how the codification is structured, including discussion of the topic, subtopics, sections, and subsections.
Describes the differences between the "general topics landing page," "industry topics land page" and "subtopics landing pages."
Opines that codification was needed to simplify access to asc, improve accuracy of research, mitigate risk of non-compliance, streamline the research process, provide real-time updates, and assist with ifrs convergence.
Explains that the goal of the codification is to simplify the organization of thousands of authoritative u.s. accounting pronouncements issued by multiple standard-setters.
Explains that this helps the user drill down a topic into subtopics in the codification.
Explains that industry topics landing page provides a list of industries on specific subtopics and the ability to join them.
Explains that when a new standard is issued and is not yet fully effective for all companies, the fsag enters it into the codification as pending content. this allows users to selectively integrate pending content related to asu eligible for early adoption.
Explains that sec content and fasb content are differentiated at the section level of the codification content’s hierarchy.
Explains that the fasb has deleted the tutorials from their website.
Explains that the new fasb codification will supersede all then-existing non-sec accounting and reporting standards form on governmental entities.
Summarizes subsection 25-3, which deals with extended warranty or product maintenance. revenue is separately priced and recognized in income based on the straight line method.
Summarizes the information in subsection s50-1, which deals with the effects on financial position and operational results due to various depreciation methods.
States that accounting standards update no. 2009-16 improves financial reporting by eliminating the exceptions for qualifying special-purpose entities from the consolidation guidance and requiring enhanced disclosures about the risks that a transferor continues to be exposed to.
“While LIFO offers significant benefits over FIFO from a tax reporting stand point, the United States is considering banning the use of LIFO”. Majority of the companies in the United States use the FIFO method, but they also have the choice of using LIFO under U.S.G.A.A.P. The IFRS has completely withdrawn from using the LIFO method. “Many companies believe the repeal of LIFO would result in an incredible tax increase for both large and small businesses.” Now they are focusing on blending the two accounting standards to reduce the differences between the two GAAP and IFRS. With a single set of standards for the whole world, it will be easier to deal with and to comprehend. International investors will be able to compare financial results of companies from the different countries with ease. (FIFO vs. LIFO: What is the Difference?)
In this essay, the author
Opines that a project on the fundamental differences between last-in, first out (lifo) and fifo under the generally accepted accounting principles and international financial reporting standards (ifrs) is an essential part of accounting.
Explains that inventory costing methods include lifo, fifo and weighted average cost.
Explains that while lifo offers significant benefits over fifo, the united states is considering banning its use.
Explains the difference between u.s. gaap and ifrs.
Explains the advantages and disadvantages of using lifo or fifo under gaap and ifrs.
The International Accounting Standards Board, (IASB), began life as the International Accounting Standards Committee (IASC) in the 1973. The IASC was created in June 1973 as a result of an agreement by the accountancy bodies of Australia, Canada, France, Germany, Japan, Mexico, the Netherlands, the United Kingdom and Ireland and the United States. These countries constituted the Board of IASC at that time.
In this essay, the author
Explains the role and evolution of the international accounting standards board (iasb). the iasc was created in june 1973 by the accountancy bodies of australia, canada, france, germany, japan, mexico, the netherlands, united kingdom, ireland, and the united states.
Explains that the international professional activities of the accountancy bodies were organized under the international federation of accountants (ifac) in 1977.
Explains that the main objective of the iasc was the development of international accounting standards, in an effort to reduce the differences in accounting practices across countries.
Explains that the iasc started with the ten board members above but gradually expanded this number and added associate members along the way. the organization began to pay visits to national standard-setters in its efforts to reduce the diversity of financial reporting practices.
States that the iasb's goal is to develop global accounting standards with the objective of having one set of standards that are relevant for creditors, investors and decision makers.
Explains that the iasb is structured in committees designed to analyze past standards and pronouncements and draft new ones.
Explains that the iasb recognizes that integrity and independence are core competencies of the accounting profession and that strong ethical values are a must for accountants.
Explains that the iasb is not just reactionary, but has established an ethics committee whose goal is to promote ethical behavior and reports directly to the board.
The accounting principles are constantly changing. Currently, there is a struggle between accountants who want to use the U.S. Generally Accepted Accounting Principles (GAAP) and the International Financial Reporting Standards (IFRS). Many companies in the United States prefer GAAP over IFRS because GAAP is more rule based, whereas IFRS is principles based. In my accounting classes, we focus on GAAP. If the U.S. decides to switch to IFRS, I will not be as well-equipped when I enter the work force. The best way to overcome this threat is to continue to monitor the situation and see if the U.S. makes the switch.
In this essay, the author
Explains that after four years of college, they are going to stay an extra twenty hours so that they can sit for the certified public accountant exam. by majoring in both accounting and finance, more job opportunities will become available.
Explains that they hope to be offered a job from an internship at ochsner hospital in gretna, and prepare for the cpa exam.
Opines that they want to live in a rural or suburban area in louisiana: gonzalez or pointe-ala-hache would be ideal places.
Opines that they want to be able to support their family without struggling financially and live in a nice home.
Explains that they need to make at least $80,000 a year ten years after graduating. the average accounting salary for recent graduates is about $53,300. after passing all four sections of the cpa exam, their salary could increase by approximately $20,000 to $40,000.
Explains that they pay attention to detail and double-check their work to improve accuracy and quickly find mistakes before it is too late.
Opines that they work best alone, but they also work very well with others.
Opines that they are dedicated and try to put their best foot forward with anything they do.
Opines that they have the drive to make themselves better and succeed in the accounting profession.
Opines that they are not good public speaking. when they speak in front of people, they feel nervous and stressed out. this problem could be overcome if they forced themselves to speak more.
Explains that they are socially awkward and find it difficult to start and continue conversations with people. this problem could be overcome if they forced themselves to speak to people they do not know.
Opines that they have a hard time telling people no, and that this weakness can be overcome if they just tell them the truth.
Explains that many businesses are looking to cut costs by hiring one person who can do both finance and accounting related jobs.
Explains that the accounting field is expected to grow 13% between 2012 and 2022, creating more job opportunities in the future.
Explains that their parents own a convenient store in plaquemines parish, which allows them to take the concepts they learn in various classes and apply it to the business.
Explains that many employers pay for new graduates to take the cpa exam, as long as they promise to stay with the company for the long-term. this would save hundreds of dollars of both application and examination fees.
Explains that the accounting profession is closely linked to how well the economy is doing, and how fewer jobs are available. internships allow them to gain experience that other applicants may not have.
Explains that there is a struggle between accountants who want to use u.s. generally accepted accounting principles (gaap) and the international financial reporting standards (ifrs).
Explains that technology continues to increase, which creates threats for accountants. as the economy rebounded from the recession in 2008, the job market for cpas is growing.
Opines that they would be an excellent addition to this organization. they are self-motivated and want to help this company provide the highest quality of service for every customer.
The success of a company is very dependent upon its financial accounting. In accounting there are numerous Regulatory bodies that govern the accounting world. These companies are extremely important to a company because they set the standards when it comes to the language and decision making of a company. These regulatory bodies can be structured as agencies, associations, commissions, and boards. Without companies like the Security and Exchange Commission (SEC), The Financial Accounting Standards Board (FASB), the Governmental Accounting Standards Board (GASB), Internal Accounting Standards Board (IASB), Internal Revenue Service (IRS), and other regulatory bodies a company could not make well informed decisions. In this paper the author will look at only four of them.
In this essay, the author
Explains that the success of a company is dependent upon its financial accounting. regulatory bodies govern the accounting world.
Explains that the security and exchange commission (sec) is responsible for assisting and overseeing companies.
Explains that the fasb is designed to establish and improve standards of financial accounting and reporting for the guidance and education of the public.
Describes the iasb as a third organization that helps to regulate accounting standards. the board is made up of nine different countries with the sole purpose of expanding accounting standard.
Explains the mission of the governmental accounting standards board, which is to establish and improve standards of state and local governmental accounting and financial reporting.
Explains that the security and exchange commission (sec), the governmental accounting standards board (gasb), iasb, and financial accounting standard boards regulate the accounting industry. each regulatory body implements the rules of honesty.
Explains the mission of the financial accounting standards board.
One of the most debatable topics in the accounting industry today is the extent in which we should make the financial statements understandable to the general population. The FASB currently gears its reporting standards toward...
In this essay, the author
Opines that the fasb's purpose is to protect all financial statement users, but there are limitations with respect to cost and feasibility.
Opines that the identification of investors and creditors as primary users of financials does not have an impact on the concept of neutrality.
Explains that the conceptual framework identifies the primary users of accounting information as investors, creditors, and those who advise them.
Opines that the inconsistencies in the fasb's sfac no. 1 should be removed.
Explains the financial accounting standards board's conceptual framework for financial reporting. wolk, dodd, & tearney.
There are general rules and concepts that preside over the field of accounting. These general rules, known as basic accounting principles and guidelines, shape the groundwork on which more thorough, complex, and legalistic accounting rules are based. The Financial Accounting Standards Board (FASB) uses the basic accounting principles and guidelines as a foundation for their own comprehensive and complete set of accounting rules and standards.
In this essay, the author
Explains that items more than ten percent of income from continuing operations would usually be considered material by all groups.
Explains that items that have less than a four or five percent effect would usually be considered immaterial by all groups.
Explains that basic accounting principles and guidelines shape the groundwork on which more thorough, complex, and legalistic accounting rules are based.
Explains that accounting theories and the generally accepted accounting principles are important in the accounting discipline since they are the rules by which things are supposed to be done.
The globalization of business has resulted in the need for compatible accounting standards that can be used internationally for financial reporting. As a result, the International Financial Reporting Standards (IFRS) were developed by the International Accounting Standards Board (IASB) to unify the various financial reporting methods and create a single accounting standard which can be applied to any financial statement worldwide (Byatt). The global standardization of financial reporting will increase the readability and enhance comparability of globally traded companies’ financial statements, without the need of conversion or translation. There are a few main differences between the International Financial Reporting Standards (IFRS) and the U.S. Generally Accepted Accounting Principles (U.S GAAP). The increasing recognition and acceptance of the International Financial Reporting Standards by accounting professionals in the United States, will affect the way in which the U.S will record financial statements in the future.
In this essay, the author
Explains that the international financial reporting standards (ifrs) were developed by the iasb to unify the various financial reporting methods and create a single accounting standard which can be applied to any financial statement worldwide.
Explains the main differences between the current u.s. gaap reporting and ifrs reporting including revenue recognition, inventory valuation, reporting assets, accrued expenses and the preparation of the statement of cash flows.
Explains the difference between u.s gaap and ifrs in the valuation of long-term assets and the disclosure of accrued expenses.
Opines that the u.s will adopt ifrs but not in its complete form, as they will likely provide provisions and amendments to accustom the united states.
Opines that the international financial reporting standards are becoming the universal standard for the preparation of financial statements. the ifrs will have a significant impact on financial reporting in the united states.
Explains the financial accounting standards board's position on ifrs and gaap. feeley & driscoll.