Financial Accounting Standards

The FASB is an agency of the federal government that has the broad powers to prescribe accounting standards to be employed by companies that fall within its jurisdiction.

The International Accounting Standards Board (IASB) was formed in an attempt to bring uniform accounting standards within international countries through its issuing of the International Financial Reporting Standards (IFRS). Today, over 100 countries including Canada, India, and Japan have adopted these standards for financial reporting. The growth of multinational companies such as Coca Cola and the increasing desire of cross-border investing have made it apparent that the U.S.accounting standards known as the Generally Accepted Accounting Principles (GAAP) issued by the Financial Accounting Standards Board (FASB) can no longer remain separate from IFRS. Under the request of the Securities and

The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) are working together to eliminate a variety of difference between the United States generally accepted accounting procedures (U.S. GAAP or GAAP) and International Financial Reporting Standards (IFRS). This convergence project grew out of an agreement reached by the two boards in 2002 (Deloitte, 2004).

FASB is largely organized 7 members as full-time job. The mission of the FASB is to establish and improve standards of financial accounting and reporting that tries to provide decision-useful information to investors and other users of financial reports in terms of nongovernmental entities. The U.S. Securities and Exchanges Commission (SEC) authorizes FASB setting accounting standards. The

International Financial Reporting Standards (IFRS) are an international set of accounting standards. Early in the 21st century, the Australian Accounting Standards board, with guidance from the Financial Reporting Council (FRC), decided to implement IFRS’s throughout Australia. This decision was made so that Australia could participate and contribute to the development of a distinct set of accounting standards that could be used all around the world.

International Financial Reporting Standards ("IFRS"), often known the original International Accounting Standards ("IAS"), are a set of accounting standards. They are issued by the International Accounting Standards Board ("IASB"), an independent, international organization supported by the professional accountancy bodies. The objective is to achieve uniformity and

International Financial Reporting Standards (IFRS) describes a common method or modality by which the financial reporting of different business organizations is carried out. Initially, different countries used to have their distinct and separate standards of financial reporting. Financial reports are possibly obtained from the financial statements of any business organization. A financial statement as principle mode enables a company to present its f0inalncial information to the outsiders who may have the interest of having the knowledge of a company's financial status. They give the position of a company's financial status, comprehensive income statement, cash flow statement, and equity changes statement.

There is a very lengthy and detailed due process that must be followed when developing standards for IFRS. The main goal of the IFRS Foundation is “is to develop, in the public interest, a single set of high quality, understandable, enforceable and globally accepted financial reporting standards based on clearly articulated principles.” The IFRS Foundation delegates the responsibility of developing standards to the International Accounting Standards Board (IASB). The IASB is continually striving to develop standards that offer the most accurate representation of an entity’s financial performance through its financial statements. These standards are intended to help lenders, investors,

AASB 8 is an important Accounting Standard from the financial information reporting perspective. It ensures that the entity has to disclose enough information to the user of financial information about the economic activities the entity is involved into and the scope or spread of these activities. The standard requires the entity to provide information about the reportable operating segments of the entity. Operating segments are the components of the entity of which separate financial information is available and it is regularly evaluated by the management – more specifically – the CODM – i.e. the Chief Operating Decision Maker to assess the performance of the particular component and to allocate resources in appropriate

Accountants have used whatever tactics they could to place a positive spin on the financial statements. Over the years, there was a need for improvements in financial reporting. In 1999, the Governmental Accounting Standards Board (GASB) issued Statement No. 34; which caused a major change in the reporting requirements of the government (Fischer, Cheng, & Taylor, 2009). This also led to a very comprehensive accounting process. GASB 34 made big improvements in how the government views their financial statements.

First, The International Accounting Standards Board (IASB) issues The International Financial Reporting Standards (IFRS) on U.S securities and exchange companies listed.

By means of conceptual framework, FASB is able to issue consistent useful standards. However FASB has been criticized for not having a formal post-implementation of standards for reviewing the effect of a newly issued accounting standard [Christine, 2011]. But the biggest criticism that the US standard setting board was more rules based and should take a more principles based approach which is more associated with IASB but it can also be said that FASB uses the principles to somewhat produce the rules for the preparers of accounting statement [Schipper 2003].

The International Financial Reporting Standards (IFRS) is the international accounting standards developed by the ISAB. The ISAB have set up the Disclosure Initiative to examine where IFRS could be improved.

After the year 2001 almost 120 countries have adopted the use of IFRS. On the other hand The United States Generally Accepted Accounting Principles have been set by the American Institute of Certified Public Accountants (AICPA) which is subject to Securities and Exchange Commission regulations. The AICPA first created the Committee on Accounting Procedure in 1939, and replaced that with the Accounting Principles Board in 1959. In 1973, the Accounting Principles Board was replaced by the Financial Accounting Standards Board (FASB) under the supervision of the Financial Accounting Foundation with the Financial Accounting Standards advisory council serving to advise and provide input on the accounting standards. Organizations such as United States Security and Exchange Commission, Financial Accounting Standard Board, and Governmental Accounting Standards Board influence the GAAP in the United States.

Across the world, many businesses and markets have adopted the use of the International Financial Reporting Standards (IFRS). People and organizations in the business world are increasingly demanding conformity and this has necessitated the shift from the U.S Generally Accepted Accounting Standards to the IFRS. However, in the United States, there is still much reluctance to adopt this change and these has caused a lot of heated debate on whether the businesses and markets should conform to the rest of the world.