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...