Topics: International Financial Reporting Standards, Financial Accounting Standards Board, Balance sheet Pages: 2 (717 words) Published: November 2, 2014

The Financial Accounting Standards Board (FASB) started in 1973 to provide standards for private sector companies to prepare their financial statements. The Securities and Exchange Commission (SEC) recognizes the standards given by the FASB as authoritative as long as the FASB fully acts in public interest. FASB standards are used by companies in the United States and IASB standards are used for companies in other areas of the world (Schroeder, Clark, & Cathey, 2011). The International Accounting Standards Board (IASB) was formed in 2001 to promote the use of international accounting standards. The IASB was formed to replace the IASC. Establishing international standards allows more comparability between financial reports in international markets. The IASB and the FASB have joined together in 2002 for the convergence project. The project is a collaborative effort to improve GAAP and eliminate differences between U.S. GAAP and IFRS. The expected result of this project is to have one set of international standards that domestic and worldwide companies can use to prepare their financial statements. The combined effort of the FASB and IASB will be a conceptual framework that will provide a universal structure for creating financial reporting standards. The FASB framework and the IASB framework are quite similar, which makes the convergence project possible. The major difference between the two is that the FASB has more detailed guidance, which allows future development of standards. The IASB’s framework leaves the interpretations up to the user of the information. The IASB has three equivalents to FASB pronouncements; segment reporting, discontinued operations, and valuation of intangible assets. IFRS No. 8 and SFAS No. 131 both require that companies disclose the total liabilities for their reportable segments. SFAS No. 144 and IFRS No. 5 refer to discontinued operations. For both standards discontinued operations is defined as being “a component of an entity...

References: IASB Equivalents to FASB Pronouncements. (2011). Retrieved on March 8, 2013 from
Schroeder, R. G., Clark, M. W., & Cathey, J. M. (2011). Financial accounting theory and analysis: Text readings and cases (10th ed.). Hoboken, NJ: Wiley.
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