Table of Contents
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Facts about FASB and IASB
Similarity and differences between FASB and IASB, Efforts to resolve differences in the standard between FASB and IASB,
| Convergence of FASB and IASB
The needs of harmonization of internal accounting standards
| Obstacles of harmonization of accounting standards, discussion and evaluation on whether it will be accepted by all users
Financial Accounting Standards Board (FASB) is an organization in the private sector which is responsible to establish standards which govern the preparation of financial statements of non-governmental entities since 1973 where the standards are recognized as authoritative by the Securities and Exchange Commission (fasb, n.d.). The standards are necessary for an efficient economy because of the decisions made is relied on the accuracy and the degree of understandability of the financial statements by the users (fasb, n.d.). Its mission is to establish and develop standards of financial accounting and reporting which enable financial reporting by non-governmental entities to provide useful information for decision-making to investors and other users of financial reports (fasb, n.d.). FASB consists of 7 full-time members who may serve up to two five-year terms (fasb, n.d.). FASB members and its staff have the knowledge and experience in investing, accounting, finance, business, accounting education and research in which they are concern of the investors, other users and the public in the matters of financial accounting and reporting (fasb, n.d.). They are independent of other organizations and the Foundation has implemented policies to avoid potential personal conflicts of interest (fasb, n.d.). IASB
International Accounting Standards Board (IASB) is an independent board which functions to set accounting standards in London and it is a privately funded organization (Wikipedia, n.d.). IASB is the successor to the International Accounting Standards Committee (IASC) and was formed on 1 April 2001 with the responsibilities of developing the International Financial Reporting Standards (IFRS) and promoting its usage in preparing the financial statements (Wikipedia, n.d.). Its body structure includes the IFRS Foundation which has few bodies namely the Trustees, IASB, IFRS Advisory Council and IFRS Interpretations Committee. Currently, it has 15 members with each having a right to vote once in which they have been chosen based on their experience of setting standards, preparing and using accounts and academic qualifications (Wikipedia, n.d.). In January 2009, the Trustees have decided on the first part of the second Constitution Review where an announcement of the creation of a monitoring Board, growth of IASB in terms of number which has increased to 16 members and are more concern of the geographical composition of the IASB (Wikipedia, n.d.). Similarity and differences between FASB and IASB
Both FASB and IASB are associated with accounting and have function in the same manner but they are still different in various matters (differencebetween, n.d.).
The first difference would be on their origin place and the period in which they came into existence in which FASB is based in the United States since 1973 whereas IASB is based in London, United Kingdom on 1 April 2001 (differencebetween, n.d.). The second difference would be on the number of its members where FASB has 7 full-time members and IASB has 16 members. Next, FASB takes the place of Accounting Principles Board (APB) and Committee on Accounting Procedure (CAP) but IASB replaced the International Accounting Standards Committee (IASC) (differencebetween, n.d.). The fourth difference is on their different roles concerning the financial reporting issue where FASB is concern on the development of Generally Accepted Accounting Principles (GAAP) in the public interest...
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