Both the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) are getting together to make one global standard. This standard will be applied globally to all accounting statements produced. There are many great benefits in having one accounting standard that can be applied globally. Although coming up with this global standard is a hard process since there are many things the Boards have to consider. The board have to consider the way the standard engages many governments, investors and companies while at the same time the involvement of other countries and their social development and culture which can be hard to an agreement. The IASB and the FASB are currently working together to come with a …show more content…
Current financial reporting crisis in the U.S. implores the need to come up with a better accounting standard that ought to be acceptable internationally. Companies looking for investment or capital opportunities across national boundaries tend to face high costs and time issues. These firms need to reconcile their financial statements to comply with the accounting rules of the nation. Both of the IASB and FASB have come up with standards that will progress the efficiency of global capital markets by lowering cost of capital, improve comparability, and enhance corporate authority (Schroeder, Clark, Cathey, 2005). The objective of the current goals is to provide a time frame for the junction efforts in the perspective of removing the need of the agreement between both of the boards. There are several dissimilarities that can be compared between FASB’s original statements and the IASB statements. There are differences because of standards, program goals, time, alternative and/or related guidance that may be required by the IASB yet not by the FASB. The intention of understanding the differences or the similarities will relate to the understanding of the challenges that the borads will face in the convergence project. The goal of the IASB and FASB is to come up with a set of high quality of global standards for a long
According to the FASB Accounting Standards Codification, goodwill is “An asset representing the future economic benefits arising from other assets acquired in a business combination or an acquisition by a not for profit entity...” (glossary). Goodwill is measured by the premium price we pay for a company; we calculate premium price by subtracting the amount we paid by the estimated price (Fair value) of the company and if we paid more goodwill is created. Goodwill is an intangible asset so it has an indefinite life because it cannot lose value over a specific amount of time. We test for impairment to find out if goodwill has kept its value or if it has declined and we test for impairment on an annual basis. However, goodwill in FASB Accounting Standards
Financial Accounting Standards Board (FASB). Accounting Standards Codification TM. Financial Accounting Standards Board (FASB), 2010. Web. 16 May 2014.
The Web. 22 Apr. 2009. The 'Standard' of the 'Standard'.
The goal of the Codification is to simplify the organization of thousands of authoritative U.S. accounting pronouncements issued by multiple standard-setters. To achieve this goal, the FASB initiated a project to integrate and topically organize all relevant accounting pronouncements issued by the U.S. standard-setters including those of the FASB, the American Institute of Certified Public Accountants (AICPA), and the Emerging Issues Task Force (EITF)
GAAP and IFRS have their similarities as well as differences. “GAAP is the accounting standard used in the US, while IFRS is the accounting standard used in over 110 countries around the world. GAAP is considered a more rules based system of accounting, while IFRS is more principles based” (Diffen). The Diffen site compared GAAP and IFRS elements using a chart. The chart is broken down into sections such as performance elements, required documents, inventory estimates and reversal, purpose of framework, etc. GAAP and IFRS both use revenue, expenses, assets, and liabilities as performance elements; but with GAAP gains, losses, and comprehensive income are added. GAAP and IFRS also use some of the same financial statements such as the balance
It has also been designed to allow latitude of new technologies and innovation. People at large are invited and encouraged to be a part of the open consensus code development procedure of the IAPMO. The code is updated every three years. you can get hold of the minutest details about the code and the development timeline of the code at the website of the IAPMO. The main contents of this code include administration, definitions, general regulations, fixture fittings and plumbing fixtures, water heaters, sanitary damage, water supply and distribution, vents, indirect wastes, interceptors and traps, storm drainage, medical gas and vacuum systems and health care facilities, fuel piping, firestop protection, referenced standards, nonpotable rainwater catchment systems and alternative water sources of nonpotable
In the world of international finance there are two major accounting systems; GAAP, which stands for Generally Accepted Accounting Principles, and IFRS, which stands for International Financial Reporting Standards. The United States prefers GAAP while the European market, as well as many other countries, prefers IFRS. By 2015 the Securities Exchange Commission is anticipating a total transfer to IFRS in the United States. Though the differences between GAAP and IFRS are few, they could affect accuracy of financial reporting throughout the world. It is important to understand the differences and similarities between both GAAP and IFRS if one is to globalize ones market (Logue).
The electronic version of the. Retrieved April 21, 2003, from http://www.ericfacility.net/databases/ERIC. McKey, Al. (1985) The 'Standard' of the 'Standard'.
These federal standards will be used going forward in conceptualizing the
These varying standards have created inconsistencies between the reporting of financial statements. The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) collaborated to develop a compatible set of accounting standards that would provide one framework to solve this problem. The team introduces initial drafts of new revenue recognition standard during 2010 and 2011. The final standard was issued on May 28th, 2014.
dable, enforceable and globally accepted international financial reporting standards (IFRSs) based up on clearly articulated accounting principles.
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.
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. Harmonization is the name given to the process of reducing differences in financial reporting practices and increasing comparability of financial statements in various countries. As such the intent of the IASC was to create a set of accounting rules that would be relevant and consistent to all countries ...
... FASB face challenges in pursuit of joint conceptual framework’, Journal of International Financial Management & Accounting, vol. 18, issue. 1, pp. 39-51, Wiley Online Library Database, viewed 28 April 2014, DOI 10.1111/j.1467-646x.2007.01007.x
: Development – covers the overview of the supervisory authority and the issues and solutions to the core