This convergence was done in order to improve the two main US accounting principles i.e. IFRA and GAAP. China and Japan also worked in this coverage of two boards. In accordance with the 2010 reports, the Securities and Exchange Commission’s have issued a statement of global accounting standard and convergence in order to direct the SEC staff. This was done to make a work plan which should be used to incorporate IFRA standards in US financial reporting system (Colson, Robert H, 2003, p.22). A brief history on the relationship of these two boards is described below: Interest of international accounting began in 1950s due to the integration of World War II and due to the increase of capital flaws in the systems. An international congress of accountant was hosted by American Institute of Certified Public Accountants in 1962. It discussed the steps for the development of accounting, auditing and other reporting standards. The first textbook of international accounting was published in 1967 which was written by a member of FASB. IASB and FASB relationship was informal one. But in 1988 FASB became a member of IASC which meant that FASB was able to participate in the meetings of IASC. In 1993 FASB and its counter party conducted a joint venture project. This resulted in the improvement of in the relationship and standards of these two boards. In 2000 use of international accounting standards increased rapidly due to which IASB and FASB decided to collaborate and explore US international standards. IASB and FASB finally decided to collaborate and work together in order to improve the US accounting standards. This partnership has been mentioned in “The Norwalk Agreement.” A memorandum of understanding was issued by both of the boards in 2006. It described the targeted performance they hope to achieve by 2008. In this MOA they shared their common objective with high quality accounting standards. Both the boards completed the first joint project and issued a converged accounting standard on business combination in 2007. FASB and IASB updated its memorandum of understanding in 2008 in order to establish convergence goals of 2011. FASB reported the status of their project in order to converge and improve UC GAAP accounting standards in 2010. First quarter congress report was issued by both the boards which reported modification of their joint work plan. A progress report was issued by both the boards in 2011. It reported the progress of the convergence work program. In this report it gave priority to the three main areas i.e. leasing, financial instrument and revenue recognition. 1.2 IASB equivalents of the FASB original pronouncements FASB and IASB mainly establish standards in relation to finance and accounting which helps nongovernmental organizations to prepare financial statements. FASB major pronouncement is to develop the principles of general accounting, while IASB focuses on international financial reporting analysis. This indicates that IASB is not equivalent of the pronouncements of the other board. There exists difference in the practices of both the boards. FASB uses a rule based approach, which differs from the principles of IASB; it focuses on techniques, processes and organization. In spite of these differences in the original pronouncement, both the boards have agreed to converge for the best interest of financial economy. This means that the main reason of the convergence was to set universal standards of accounting. In order to reduce these differences meetings were conducted by auditors to ensure the success of both the boar
Relationship between IASB and FASB. The IASB main aim is to make international financial reporting standards while FASB focuses on a rule based approach. The two boards IASB and FASB are working together since 2002…
It often fails to analyse the political, economic and cultural. Watts and Zimmermann (1978) was a major change in this regard, as it focused on how firms with reduced earnings theoretically should and empirically did resist accounting policy change. Watts and Zimmermann (1978)'s research was the opening salvo of a growing body of literature focusing on the intersection between political and economic calculuses in the field of accounting, as well as creating interest in positive accounting.
As a result, the first step towards a universal system took place with the introduction of International Financial Reporting Standards (IFRS). A new standard was created, IRFS 13, and was implemented in over 100 countries.
The accounting standards boards of all the countries of the world have always involved themselves into various kinds of politics, both at the national as well as the international level and this had its effect on the course of the formulation of the standards.
After this, the board members will include all recommendations when they sign it. After signing the international accounting standards, all member nations must implemented to the letter accounting procedures mentioned in the international accounting standards.
The CAFR is divided into three parts: introductory, financial and statistical (State of Washington). The introductory part is responsible for giving the transmittal letter. The financial contains the auditor's reports along with financial statements and management analysis.
The Accounting standards board (ASB), has already declared its intention of replacing UK GAAP with IAS's and making them compulsory for all UK companies no matter what size, thus the benefits and costs of these standards are of high importance to the UK.
Earlier, in the absence of a fixed set, various organisations followed their own practices framed according to their own convenience. This dissimilarity in the accounting policies resulted in various problems and thus made it
This convergence was done in order to improve the two main US accounting principles i.e. IFRA and GAAP. China and Japan also worked in this coverage of two boards. In accordance with the 2010 reports, the Securities and
Operating within the United States, companies under the Security Exchange Commission are required to report their financial information along with appropriate disclosures as per the US GAAP.
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