Preview

Relationship Between the Ifrs and the Fasb

Better Essays
Open Document
Open Document
1230 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Relationship Between the Ifrs and the Fasb
Relationship between the IFRS and the FASB
Hadassah Moore
ACC/541
May 14, 2013
Instructor: Sonja Wilson

Relationship between the IFRS and the FASB
The principle of accounting dates backs thousands of years to a time where those in positions of governance wanted to make others aware of their growth and progress. Shift forward, and now the principles of accounting have moved towards an interest in investments and creating wealth for all those who hold stock within the company. This has led to the creation of standards and guidelines by which these accounting principles adhere to, producing financial statements which follow the four qualitative characteristics (reliable, relevant, comparable, and understandable). The Financial Accounting Standards Board (FASB), under the guidance of the Securities Exchange Commission (SEC) established the GAAP which governs US companies with their application of accounting principles to the presentation of their financial statements. The IASB has created the IFRS which serves the same purpose but for the global financial community. A convergence of these two entities began in 2002 with the IASB and FASB coordinating together to produce accounting standards in a world where accounting standards are often amended. With ever-increasing changes in the realm of accounting it becomes important to for those in the profession of accounting to be aware of these changes and the impact they have on the reporting of a company’s financial outlook. The Masters of Accountancy program is designed to provide a comprehensive background of the creation of the FASB and the IASB, the relationship between their accounting standards, and how their standards measure up to one another.
The Convergence of the IASB and the FASB
The FASB is the governing body of accounting standards for the United States whereas the IASB is the governing body of accounting standards for the world. The FASB 's main purpose is to uphold the GAAP (generally


References: Schroeder, R.G., Clark, M.W., & Cathey, J.M. (2011). Financial Accounting theory and analysis (10th ed.). Hoboken, NJ: John Wiley & Sons, Inc.. International Convergence of Accounting standards—a brief history. (n.d). Retrieved from http://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1176156304264 The Accounting standards of board essay. (2010). Retrieved from http://www.freeonlineresearchpapers.com/accounting-standards-boards-essay
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Powerful Essays

    Where Does the Us Stand on the Adoption of Ifrs?
    • 1356 Words
    • 6 Pages

    Where Does the Us Stand on the Adoption of Ifrs?

    In September, 2002, one of the most significant changes in the future direction of the United States’ accounting regulations occurred during a joint meeting of the US Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB). The meeting concluded with the Norwalk Agreement that articulated the commitment of both renowned boards to converge their standards into a single set of high quality global accounting standards (FASB and IASB, 2002). Since that meeting, the International Financial Reporting Standards (IFRS) and the US Generally Accepted Accounting Principles (US GAAP) have been gravitating towards one another.…

    • 1356 Words
    • 6 Pages
    Powerful Essays
    Read More
  • Better Essays

    Acc 541 Accounting Standards Board Paper
    • 1115 Words
    • 5 Pages

    Acc 541 Accounting Standards Board Paper

    The field of accounting is constantly evolving. This is true not only for the theory of accounting itself but also the entities that govern its theory and practice. Presently, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) are faced with some of the biggest challenges to date. To understand the significance of these two boards, it is necessary to understand their histories, relations between the boards, and the standards that they set. Also how the knowledge of these boards and the field they lead, gained through the masters of science in accountancy (MSA) program, prepare students for a career in accounting.…

    • 1115 Words
    • 5 Pages
    Better Essays
    Read More
  • Good Essays

    The Differences and Similarties Between the Gasb and the Fasb
    • 749 Words
    • 3 Pages

    The Differences and Similarties Between the Gasb and the Fasb

    The FASB mission statement states, “that it is to establish and improve standards of financial accounting and reporting that foster financial reporting by nongovernmental entities and provides decision-useful information to investors and other users of financial reports. That mission is accomplished through a comprehensive and independent process that encourages broad participation, objectively and considers all stakeholder views and is subject to oversight by the Financial Accounting Foundation’s Board of Trustees.’ The FASB deals with all nongovernmental entities such as the private business, like and Internet company or a fitness facility, or a restaurant. The FASB is a useful tool for new prospective investors that may want to invest in a business or entity. The FASB is also very useful for the stakeholder in a particular company providing the information useful for financial reporting (fasb.org).…

    • 749 Words
    • 3 Pages
    Good Essays
    Read More
  • Good Essays

    U.S. Gaap vs. Ifrs
    • 780 Words
    • 4 Pages

    U.S. Gaap vs. Ifrs

    The Financial Accounting Standards Board (FASB) developed the United States Generally Accepted Accounting Principles (GAAP) has been used in US corporations for over 75 years. It allows financial statements from all corporations to be compared accurately and efficiently, and serves as a guideline for accountants.…

    • 780 Words
    • 4 Pages
    Good Essays
    Read More
  • Good Essays

    Comparing IFRS to GAAP
    • 889 Words
    • 3 Pages

    Comparing IFRS to GAAP

    In the Accounting industry, there are various principles and guidelines by which financial accountants, analysts, and organizations need to abide by. The International Accounting Standards Board (IASB) issues standards (IFRS) that have been adopted by the United States and several countries outside of the U.S. (Kimmel, Weygandt & Kieso, 2010). The IFRS along with Generally Accepted Accounting Principles (GAAP), professionals in the accounting industry use these guidelines as a baseline on which accounting practices are built upon. These standards are governed by the Securities and Exchange Commission (SEC) which ultimately oversees U.S. financial markets and accounting standard-setting bodies. Moving forward, the elements of IFRS and GAAP will be discussed to illustrate the similarities and differences and how it relates to Accounting and used in business practice.…

    • 889 Words
    • 3 Pages
    Good Essays
    Read More
  • Better Essays

    Fasb
    • 1094 Words
    • 5 Pages

    Fasb

    The FASB’s mission is to create and improve financial accounting standards for the assistance and education of the public.…

    • 1094 Words
    • 5 Pages
    Better Essays
    Read More
  • Good Essays

    Relationship Between Iasb and Fasb
    • 1160 Words
    • 5 Pages

    Relationship Between Iasb and Fasb

    In 1973, the private sector International Accounting Standards Board (IASB) was formed. The IASB is a natural extension of a global market that has been evolving over the last three decades. The IASB formulates and publishes accounting standards to be observed when presenting financial statements and promote their global acceptance. As an overarching mission, the IASB works to improve and harmonize accounting standards, regulations, and procedures as it relates to financial statements. IASB standards provide a reference model and set of examples for financial reporting in developing countries. The IASB has no authority with the Financial Accounting Standards Board (FASB) or the Securities and Exchange Commission (SEC) in the United States at this time. Even though the FASB and SEC are not members of the ISAB, the SEC has ruled formally that public companies that have adopted the IASB standards can list their securities on the United States stock exchanges (Schroeder, Clark, & Cathey, Chapter 1, 2011).…

    • 1160 Words
    • 5 Pages
    Good Essays
    Read More
  • Better Essays

    Financial Statements Ifrs vs. Gaap
    • 1606 Words
    • 7 Pages

    Financial Statements Ifrs vs. Gaap

    For those in the business world, particularly in the accounting field, a major issue has surfaced in recent years relating to the differences between Generally Accepted Accounting Principles (GAAP) and the International Financial Reporting Standards (IFRS). Currently, the majority of countries in the world follow International Financial Reporting Standards guidelines; however, the United States still uses GAAP. This topic has been a main focus because there is a plan for convergence between the two frameworks in the near future. The United States accounting system will undergo drastic changes when this occurs, but in the long-run the idea is to simplify the accounting procedures around the world. “Through these projects, some covering major components of the financial statements, the boards intend to improve financial reporting information for investors while also aligning US and international accounting standards. These projects are a significant move toward achieving a common accounting framework, a necessary step in the globalization of business and investment” (PriceWaterhouseCoopers LLP, 2011). The main difference between GAAP and IFRS is that GAAP is considerably rule-based, whereas IFRS is more principal-based which means IFRS has room for interpretation. The specific differences are far too many to cover in a short presentation, however, an explanation of some major differences are mentioned below.…

    • 1606 Words
    • 7 Pages
    Better Essays
    Read More
  • Powerful Essays

    Gaap vs Ifrs
    • 6672 Words
    • 27 Pages

    Gaap vs Ifrs

    The generally accepted accounting principal (GAAP) and international financial reporting standard (IFRS) are standards governing how economic events are reported. In the United States, the Securities and Exchange Commission (SEC) relies on the FASB, the accounting standard-setting body of the US, to develop accounting standards that public companies must follow when publishing financial statements. On the other hand, many countries outside of the Unite States have adopted the International Financial Reporting Standard (IFRS) which is issued by the International Accounting Standard Board (IASB). In recent years, the FASB and IASB have worked closely to try to minimize the differences in their standards and principals and to merge the two systems in the future.…

    • 6672 Words
    • 27 Pages
    Powerful Essays
    Read More
  • Good Essays

    Gasb and Fasb Comparision
    • 630 Words
    • 3 Pages

    Gasb and Fasb Comparision

    The GASB and the FASB are similar in one way for sure. Both organizations are were created to help businesses or organizations follow a standard accounting method so no matter the business the reports could give the same information. The main difference is the FASB monitors the profit making companies but the GASB helps regulate state and local governmental organizations in 1984 (FASB). Both the FASB and the GASB pick and manage their members, making sure they have funding and what their general oversight will be for the organization (FASB). The FASB will identify problems or issues that are brought up from the stakeholders but in the GASB there are no stakeholders. The GASB is in place to help the public understand the standards they are requiring the organizations to follow (GASB).…

    • 630 Words
    • 3 Pages
    Good Essays
    Read More
  • Better Essays

    Intermediate Accounting I Final Paper
    • 1757 Words
    • 8 Pages

    Intermediate Accounting I Final Paper

    In 1973, the Financial Accounting Standards Board (FASB) was created and their mission is “to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors, and users of financial information.” (FASB.org, 2009a). The FASB is a private, not-for-profit organization whose primary purpose is to develop generally accepted accounting principles (GAAP) within the United States. The Securities and Exchange Commission (SEC) designated the FASB as the organization responsible for setting accounting standards for public companies in the U.S. Therefore, the FASB plays a vital and important role in protecting the financial well being and the overall stability of our economy.…

    • 1757 Words
    • 8 Pages
    Better Essays
    Read More
  • Better Essays

    Acc 541 Accounting Standards Board Research Paper
    • 1149 Words
    • 5 Pages

    Acc 541 Accounting Standards Board Research Paper

    For the past 31 years, the major changes in accounting have taken place. Several accounting committees and boards have come and gone. The purpose of this paper will be to examine the Financial Accounting Standards Board and the International Accounting Standards Board convergence project. These papers will also explain how the MSA program prepares students on the transition into professional accounting.…

    • 1149 Words
    • 5 Pages
    Better Essays
    Read More
  • Good Essays

    History of the Financial Accounting Standards Board and the International Accounting Standards Board
    • 883 Words
    • 4 Pages

    History of the Financial Accounting Standards Board and the International Accounting Standards Board

    The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) are currently working together on a short-term international convergence project to remove a variety of individual differences between United States Generally Accepted Accounting Principles ( U.S. GAAP) and the International Financial Reporting Standards (IFRS) (Schroeder, Clark, & Cathey, 2005). U. S. GAAP are the laws of accounting in the United States. They govern how accountants measure, process, and communicate financial information about companies to the majority of Americans (Horngren, Harrison, Jr., & Bamber, 2005). Similarly, IFRS are principles, standards, interpretations, and the framework adopted by the IASB, stating how particular types of transactions and other events should be reported in financial statements (Investopedia, 2010).…

    • 883 Words
    • 4 Pages
    Good Essays
    Read More
  • Powerful Essays

    Accounting Standards Boards Paper 4
    • 1448 Words
    • 42 Pages

    Accounting Standards Boards Paper 4

    References: Financial Accounting Standards Board (FASB). 2002a. Proposal: Principles-Based Approach to US Standard Setting. File Reference No. 1125-001. Norwalk, CT: FASB. Retrieved from http://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1176154526495 Hail, L., Leuz, C., and Wysocki, Peter D., Global Accounting Convergence and the Potential Adoption of IFRS by the United States: An Analysis of Economic and Policy Factors (February 25, 2009). Retrieved from http://www2.lse.ac.uk/accounting/news/MAFG/Leuzpaper.pdf Hinson, Y. (2009) Differences Between IFRS and GAAP Could Create Challenges for Educators. Retrieve from http://www.corporatecomplianceinsights.com/2009/differences-ifrs-gaap-challenges-educators/ Schroeder, R.G., Clark, M. W., & Cathey, J. M., (2005). Financial Accounting Theory and Analysis. 8th edition. John Wiley & Sons, Inc. Whittington, G. (2008). Fair Value and the IASB/FASB Conceptual Framework Project: An Alternative View. Retrieved from http://onlinelibrary.wiley.com/doi/10.1111/j.1467-6281.2008.00255.x/full…

    • 1448 Words
    • 42 Pages
    Powerful Essays
    Read More
  • Good Essays

    Fasb Vs Ifrs
    • 428 Words
    • 2 Pages

    Fasb Vs Ifrs

    The FASB takes an interest effectively in the improvement of IFRS, giving info on IASB ventures through the IASB's Accounting Standards Advisory Forum (ASAF) and through different means. The FASB adds to the improvement of IFRS by sharing perspectives in light of its past experience or created through the FASB's expected procedure, partner effort, examination, and thoughts. We trust our endeavors to enhance GAAP advantage from the global viewpoints increased through our cooperations with the IASB.…

    • 428 Words
    • 2 Pages
    Good Essays
    Read More

Related Topics