(Assignment) The Evolution of US GAAP It is a difficult task in a country like the US to impose highly prescriptive standards through rigorous enforcement process by a government regulator. It is very evident from the history of the effort made to secure compliance with accounting standards…
However, high-tech companies, with the help of Congress, effectively stopped this move. Instead, the amount of expense for options recently granted was to be mentioned in a footnote. Then, FASB started developing a standard that would force companies to expense the fair value of stock options granted to executives and other employees. However, as Zeff points out, company CEOs were quick in opposing as it would affect their personal compensation packages. When it became clear that FASB would continue with its efforts, the companies sought the help of Congress. It was discussed in the House and the Senate where majority of the members opposed, evidently under pressure from companies. As FASB further proceeded in issuing a standard, the Senate passed a resolution stopping FASB from acting further in that regard. More issues were to come. FASB issued the directive on reporting the comprehensive income either through a separate statement of comprehensive income or an additional section in the income statement. The companies wanted to disclose it in the Statement of Changes in Shareholders’ Equity. However, FEI pressured FASB to allow presenting it in a financial statement that few readers notice. ...
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The research demonstrates that the manner in which the FASB, IASB and the SEC have been working towards achieving convergence between the US GAAP and IFRS is indeed questionable. Despite several delays, there appears to be commitment between both sides to achieve a universal accounting framework at the earliest.
Account standardization, IFRS and US GAAP.
Accounting refers to the systematic way of summarizing, analyzing and reporting the financial transactions. Accounting helps in clearly understanding the financial position of the organization and comparing it with other organizations within a particular financial period.
The main objective of financial reporting is to communicate to investors, creditors, and other interested parties the financial outcomes of a business in a understandable and useful way. The basic responsibility for reporting those financial outcomes rests with the business’s management.
FASB chairman, Robert Herz, in an interview with the Accounting and Business magazine, noted that increased comparability for investment analysis is a benefit US businesses could reap out of the switch to IFRS
The information is of importance to management, investors, creditors, employees and other government organizations. Financial statements are written reports describing quantitatively the financial health of a company. An income summary shows the income and expenditure of a firm or a balance sheet shows the assets and liabilities and equity of a company are all examples of financial statements.
Understanding primate social behavior to understand human evolution is very important. The social behavior culture and different aspects of human society have changed from million of years and is still changing. The culture, social relationships, and roles within a society has developed and evolved now.
tates companies abide by the Generally Accepted Accounting Principles, while in Europe companies abide by the International Financial Reporting Standards. The utilisation of each of these frameworks affects the information contained within them. This proposal studies the effect
to collate information regarding these transactions in a manner that allows for investors and other stakeholders to understand the true business dynamics of the entity, and their positioning in the market in terms of various metrics utilised by accountants and analysts as
The current status of SEC acceptance of IFRS statements for the US based companies is described below.
SEC seems shifting from US GAAP to IFRS statements for the US based companies because of the differences between these two