Preview

Principles of Accounting

Powerful Essays
Open Document
Open Document
5441 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Principles of Accounting
ACCT 112: PRINCIPLES OF ACCOUNTING 1
ACCOUNTING THEORY NOTES

(a) International Accounting Standards and International Financial Reporting Standards.
The foreword to accounting standards defines Accounting Standards as Authoritative statements of how particular types of transaction and other events should be reflected in financial statements. Accounting Standards are developed to achieve comparability of financial information between and among different organizations. International Accounting Standards (IAS’s) and International Financial Reporting Standards (IFRS) are meant to apply to most organizations in the world. IAS’s and IFRS’s are produced by the International Accounting Standards Board (IASB) whose objectives are: (a) To formulate and publish in the public interest accounting standards to be observed in the presentation of financial statements and to promote their worldwide acceptance; and (b) To work generally for the improvement and harmonization of regulations, accounting standards and procedures relating to the presentation of financial statements.

The IASB is an affiliate of the International Federation of Accountants (IFAC) established in 1977 which co-ordinates the Accounting profession worldwide. Most accounting bodies of countries are members of IFAC.
The IASC develops IAS’s through an international process that involves the worldwide accountancy profession, the preparers, users of financial statements and national standard setting bodies and other interested parties.
The IASB sets up a steering committee to develop a statement of principles, an Exposure Draft and ultimately an Accounting Standards once a new topic is suggested. The process includes:

* Identifying and reviewing of all the issues associated with the topic, * Studying national and regional accounting requirements and practice, consultation with the member bodies’ standard setting bodies and other interested groups, * Public Exposure of the draft

You May Also Find These Documents Helpful

  • Powerful Essays

    cultural differences underlying global accounting standards. Journal of Financial Service Professionals, 16-18. Retrieved June 19, 2009 from http://search.ebscohost.com…

    • 1751 Words
    • 8 Pages
    Powerful Essays
  • Satisfactory Essays

    Regulatory Bodies

    • 380 Words
    • 2 Pages

    The major regulatory body International Accounting Standards Board, also known as IASB, has a function of creating the global general accepted accounting practices. They work with countries to create the GAAP.…

    • 380 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Comparing IFRS to GAAP

    • 889 Words
    • 3 Pages

    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
  • Better Essays

    Fasb

    • 1094 Words
    • 5 Pages

    The IASB was established in 2001, after succeeding the International Accounting Standards Committee (IASC) which was established in 1973. The International Accounting Standards are created by the IASB and are called International Financial…

    • 1094 Words
    • 5 Pages
    Better Essays
  • Good Essays

    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
  • Good Essays

    References: Clay, M. E. (2007). IASB and FASB Working Together to Converge Accounting Standards. Proceedings of…

    • 883 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    The FASB, which is used broadly in the United States, sets General Accept Accounting Principles (GAAP). It was established by the American Institute of Certified Public Accountants (AICPA) because of recommendations from the Wheat committee in 1973. FASB has responsibility to set accounting standards for public company. The members of the FASB are full-time employees from various organizations such as the American Accounting Association; the AICPA; the Association for Investment Management and Research; the Financial Executives Institute; the Government…

    • 1448 Words
    • 42 Pages
    Powerful Essays
  • Powerful Essays

    With the growing number of multinational corporations, principles were required to surmount the obstacles and price related with generating numerous financial reports. In 1973, the International Accounting Standards Committee (IASC) was the first international group created to establish accounting standards. The IASC was restructured in 2001, and at that time became autonomous, renaming itself the International…

    • 1475 Words
    • 6 Pages
    Powerful Essays
  • Best Essays

    The International Accounting Standards Board (IASB) began operations in 2001. It is an organization committed to developing, in the public interest, a single set of high quality, global accounting standards that require transparent and comparable information in general purpose financial statements. The IASB has developed procedures that bring transparency, predictability, and consistency (IASCF Press Release, December 2, 2007).…

    • 1444 Words
    • 6 Pages
    Best Essays
  • Satisfactory Essays

    Fasb Convergence

    • 543 Words
    • 3 Pages

    IASB was formed in 1973 under the name International Accounting Standards Committee. Its mission was to formulate and publish in the public interest basic standards to be observed in the presentation of audited accounts and financial statements and to promote…

    • 543 Words
    • 3 Pages
    Satisfactory Essays
  • Good Essays

    Fasb Convergence

    • 1091 Words
    • 5 Pages

    In 2001, the IASC was replaced by the IASB “(Schroeder, Clark, & Cathey, 2011, p. 82). The IASB wants to formulate and publish accounting standards and to promote them globally. The IASB currently consists of 15 individuals appointed by the trustees. The membership is based on the technical expertise. “On December 17, 2003, the IASB published 13 revised International Accounting Standards (IASs), reissued two others, and gave notice of the withdrawal of its standard on price level accounting. The revised and reissued standards mark the near completion of the IASB’s Improvements Project “(Schroeder, Clark, & Cathey, 2011, p.…

    • 1091 Words
    • 5 Pages
    Good Essays
  • Good Essays

    The two organizations involved in international standard-setting are IOSCO (International Organi-zation of Securities Commissions) and the IASB (International Accounting Standards Board.) The IOSCO does not set accounting standards, but ensures that the global markets can operate in an efficient and effective manner. Conversely, the IASB's mission is to develop a single set of high quality, understandable and international financial reporting standards (IFRSs) for general purpose financial statements.…

    • 610 Words
    • 3 Pages
    Good Essays
  • Better Essays

    Accounting Criteria

    • 1083 Words
    • 5 Pages

    International Accounting Standards Board. (2008). iasb.org. Retrieved April 11, 2008, from http://www.iasb.org/Home.htmLibby, P., Libby, R., & Phillips, F. (2006). Fundamentals of Financial Accounting. [University of Phoenix Custom Edition e-Text]. New York: McGraw-Hill Irwin.…

    • 1083 Words
    • 5 Pages
    Better Essays
  • Better Essays

    The history begins with the International Accounting Standards Board (IASB) that was formed in 2001 following the International Accounting Standards Committee (IASC). The International Accounting Standards Committee (IASC) was responsible for issuing many of the accounting pronouncements called the International Accounting Standards (IAS). IASB also issued many accounting pronouncements called International Financial Reporting Standards (IFRS) and adopted the IAS guidelines. The IASB was form for the purpose of achieving two objectives. First, to create and publish accounting standards that would be used in presentations of financial statements promoting their acceptance and observance globally and second, to work towards the improvement and synchronization of accounting standards, regulations and procedures relating to the preparation of financial statements.…

    • 1402 Words
    • 6 Pages
    Better Essays
  • Good Essays

    Although the IASB and FASB have been striving since 2002 to achieve convergence, there are still many differences between the two. These differences range from revenue recognition to the matter in which the organizations receive funding. Under the IASB, the accrual method is the only preferred way of recognizing revenue and expenses. While FASB accepts cash basis and accrual basis; cash basis is only accepted if cash sales are less than $5 million per year. When it comes to generating funds the IASB receives most of its funding through donations from accounting firms and corporations.…

    • 815 Words
    • 4 Pages
    Good Essays