Accounting Standards Board Paper: Week 1
Accounting Standards Board Paper
International accounting is well on its way to forming one global accounting standard. The IASB and the FASB are working closely together to produce mutual accounting standards. There are numerous positives when moving toward one accounting standard, but there are just as many obstacles to make it happen. By converging the two methods into one universal style, you will have to satisfy many cultures, companies, investors and governments. This will not be an easy task, but something that both organizations are fully vested in completing.
In the United States of America, the FASB accounting standards boards are used. The FASB main focus is to develop and implement generally accepted accounting principles (GAAP). The main goal for the IASB board is to develop international financial reporting standards.
Between the two boards, there are several differences between their core standards and basic accounting principles. They are working in conjunction to establish, develop and implement one set of globally accepted accounting standards. This is a major undertaking by the IASB and FASB boards. A mutual agreement between the two organizations to work together to form one set of global accounting standards and financial reporting. This is not as easy as it may first look; the FASB applies a rules based approach while the IASB applies a more principle based approach.
Convergence between IFRSs and US GAAP
During this transition there are going to be some bumpy roads, and each side is going to have to be flexible as they become one governing board for the accounting world. Currently the IASB has a principle based standard that doesn’t provide much detail towards application guidance. The FASB mainly focuses on rule based standards that concentrate on specific application guidance. Both standards currently...