June 21, 2009
This research project will inform the reader of the difference between the United States accounting standards and International accounting standards. The United States uses the Financial Accounting Standards Board (FASB) to issue financial reporting procedures. The International Financial Reporting Standards (IFRS) are issued by the International Accounting Standards Board (IASB). There are proposals for the United States to adopt the International standards. Financial reporting procedures are debated about the United States using the Generally Accepted Accounting Procedures (GAAP) or following the global procedures. This project will also examine, compare, and contrast this debate.
Discussion of Topic
In an article by Heidi Tribunella (2009), “U.S. GAAP is considered rules based. Rules-based accounting standards, on the other hand, give strict rules that must be adhered to in order to properly account for particular transactions. For example, lease accounting in the United States gives four criteria for determining if a lease is a capital lease. If a lease contains any of the following, then it is considered a capital lease and must be accounted for as such: 1 ) a bargain purchase option; 2) ownership transfers at the end of the lease; 3) minimum lease payments with a present value of at least 90% of the FMV of the asset; or 4) a lease length of at least 75% of the economic life of the asset. This is an example of very specific rules for accounting for leases” (Tribunella, 2009).
Tribunella (2009) goes on to explain International accounting standards, “International Financial Reporting Standards (IFRS) are issued by the International Accounting Standards Board (IASB), which was created in 200l. Previously, the International Accounting Standards Committee (IASC), founded in 1973, issued International
References: Bogoslaw, D. (2008, November 14). Global accounting standards? Not so fast. Businessweek Online, 17. Retrieved June 19, 2009, from http://search.ebscohost.com Marrero, J., & Brinker, T.M. (2007, January). Are accounting standards uniform? Recognizing cultural differences underlying global accounting standards. Journal of Financial Service Professionals, 16-18. Retrieved June 19, 2009 from http://search.ebscohost.com Meek, G.K., & Thomas, W.B. (2004). A review of markets-based international accounting research. Journal of International Accounting Research, 3(1), 21-41. Retrieved June 19, 2009, from http://search.ebscohost.com Pieniazek, A. (2007, April 9). U.S. gaap vs. international gaap vs. unified gaap. Accounting,College. Retrieved June 19, 2009, from http://www.adampieniazek.com/college/us-gaap-vsinternational-gaap-vs-unified-gaap/ Tribunella, H. (2009, March). Twenty questions on international financial reporting standards. The CPA Journal,32-37. Retrieved June 19, 2009 from http://search.ebscohost.com