...current requirements even in the short term. The US standard setter, the Financial Accounting Standards Board, is also undertaking a concurrent project on financial instruments and the IASB has acknowledged that this will see further changes to IFRS 9 before its mandatory application date. The treatment of financial liabilities also remains a contentious area and was dropped from IFRS 9 very late in the process. “The IASB has grappled with the concept of how an entity’s own credit risk should impact the measurement of liabilities. The idea that an entity should make a gain from a decline in its own credit worthiness has been the source of much debate.” The IASB is concurrently considering other issues in financial instrument accounting, particularly hedging and impairment. Ms Hankey noted: “The unfinished business in financial instrument accounting is likely to meet significant resistance from preparers – again the challenge for the IASB is to develop a principle-based accounting framework reflecting commercial realities.” So what does this mean for global accounting standard setting? “The current uncertainty in global accounting standard setting is very unhelpful to preparers trying to plan for the future and take advantage of the promise of a single set of high quality accounting standards,” said Ms Hankey. “The IASB should survive this current challenge, but it may be wounded and the push towards global accounting standard setting may well suffer. Our clients are looking...
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...Accounting Standards Boards Paper Jacobian Stephens ACC/541 June 29, 2015 Mrs. JoEtta Malone Accounting Standards Boards Paper The Financial Accounting Standards Board (FASB) started the Convergence program back in 2002 and stated that a three-part strategy for seeking greater comparability in accounting standards internationally should be implemented.. FASB sought out to develop a higher quality for Generally Accepted Accounting Principles (GAAP) standards and improve the relations and communication with additional nationwide standards setters. The convergence program is to help increase the quality of recording standards. FASB and IASB recognized that increasing the comparability of principles will not be as easy as they thought. To do so, they will need the help of setters around the world to have an agreement amongst the standards. We also have to remember that FASB priority is to improve financial reporting. Doing so will help investors. Eliminate any other alterations between IFRSs and U. S. GAAP that may remain on January 1, 2005 by undertaking projects that both Boards would address simultaneously. Carry on the progress on the joint projects presently proceeding. Inspire their consistent interpretative bodies to organize their activities. FASB has been the nominated union in the private division for generating standards of financial bookkeeping that administer the training of financial reports by non-governmental entities. To improve and establish principles...
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...there be one set of accounting standards in use throughout the world in the next five years? Currently many countries have been using Accounting guidelines based on the International Financial Reporting Standards (IFRS) these are managed by the International Accounting Standards Board (IASB). The United States holds companies accountable to Accounting Guidelines maintained by the Financial Accounting Standards Board (FASB) which issues the Generally Accepted Accounting Principles (GAAP) in the U.S. markets are overseen by the Securities and Exchange Commission (SEC). The United States Financial Community is actively looking at the possibility to transition to one global accounting standard; One step towards future adoption is the SEC has recently allowed foreign firms to file reports that conform to IFRS standards rather than mandating they prepare documents using GAAP. (Kimmel, Donald , and Jerry, 64) In July 2012 the SEC’s Office of the Chief Accountant released report outlining the SEC’s reviews of IFRS standards against GAAP standards to identify gaps. While the SEC did not make a recommendation on adoption in the future it was a first step in preparing for an eventual decision. What was found is that while IFRS is a comprehensive standard there are still steps that must be taken before the U.S. can adopt the standards. (PwC) In 2006 the FASB and IASB started work on reconciling the two policies and identified 12 areas in which the IFRS standards differ from GAAP...
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...Accounting Standards Building international opportunities for Australian business Corporate Law Economic Reform Program Proposals for Reform: Paper No. 1 © Commonwealth of Australia 1997 ISBN 0 642 26110 5 This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Australian Government Publishing Service. Requests and inquiries concerning reproduction rights should be directed to the Manager, Commonwealth Information Services, Australian Government Publishing Service, GPO Box 84, Canberra ACT 2601. The Government is seeking comments from interested parties on the detail of the proposals in this paper which should be forwarded to the following address:| First Assistant SecretaryBusiness Law DivisionThe TreasuryParkes PlacePARKES ACT 2600|Telephone:Fax:Email:|02 6263 396002 6263 2882clerp@treasury.gov.au| Copies of this paper are available from the Australian Government Publishing Service and on the Treasury web site (http://www.treasury.gov.au).Enquiries concerning the paper can be made to:Ms Veronique IngramAssistant SecretaryThe TreasuryTelephone: 02 6263 3970| Printed by the Australian Government Publishing Service Table of Contents Page Abbreviations v PART 1: Reform Proposals 1 PART 2: Introduction 9 2.1 Background 9 2.2 Key economic principles 10 PART 3: The Case for Reform 11 3.1 Impetus for reform 11 3.2 What the Government is seeking...
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...International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) have a common relationship that is always evolving. There are several different items that have to be looked at before changes can be made. Due to changes in accounting practices, both boards have to take many things into account. They deal with companies worldwide, so they have to take a look at the customs for each country along with different accounting methods and economic differences as well. The Convergence Project involves both entities and tried to eliminate differences between the United States General Accepted Accounting Practices (GAAP) and International Financial Reporting. The Financial Accounting Foundation (FAF) formed the FASB in 1973 to try to correct accounting practices for nongovernmental businesses. The board was formed due to complaints of the Accounting Principles Board (APB). Two committees were created to handle some of the complaints. The Wheat Committee was responsible for studying how financial accounting principles would be formed. The Trueblood Committee was created to find a way to verify financial statements. The American Institute of Certified Public Accountants (AICPA) decided to implement the suggestions of the Wheat Committee. The FASB was also to be considered the official board to issue standards for financial accounting. The International Accounting Standards Committee (IASC) was the first organization formed to set accounting standards for multinational...
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...invest, having many different reports requirements, require time and money to interpret them, so they tend to trust more on reports that follow the Accounting Standards Board (IASB). On today’s market company that follows the IASB standards have a competitive advantage in the stock market. The IASB sets the international rules and practice of the financial information, working to minimize the differences between the standards (IFRS) throughout the world. Companies that follow the International Financial Reporting (IFRS) standards have transparent, comparable, relevant, consistent and reliable financial information, on which the investors can count on. Adopting one type of accounting standards reduces the cost and time the company has to produce them and the time for investors to interpret them. For that reason, companies around the world are adopting the International Financial Reporting standards (IFRS), there are over 100 countries that already adopted the standards. I believe that in 5 years many more will adopt the IFRS standards, for all the advantages it brings to the financial market. Adopting one type of accounting standards will make it easier for investors, lenders and companies to communicate. It’s like having one universal language. References Kimmel, P.D., Weygandt, J.J, & Kieso, D.E. (2009). Accounting: tools for business decision making. John Wiley & Sons, Inc. http://www.sec.gov/rules/concept/34-42430.htm http://www.thecaq...
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...new or changed standard, how it is approved and also the way in which the objective of financial reporting was changed. A new standard arises because it is realized that certain aspects of the framework need to be tightened up or made clearer, which means reporting becomes easier. A lot of the time changes are made to existing standards, rather than drafting a whole new standard. A new standard comes about via a process set out in paragraph 31 of the constitution. Firstly an exposure draft must be published by the international accounting standards board. This is a preliminary release of a statement, which presents the text of the proposed statement for comment by the public. Public hearings are held to discuss the proposed standard. However standards can be set without holding public hearings. The public are made well aware of any considerable changes to international accounting standards, this is largely through the Internet on the IASB website, where they broadcast all meetings. These meetings are closely followed by interested parties, who can give feedback on the proposed new IAS. The minimum period between application and approval of a new standard is one year. The International financial reporting interpretations committee (IFRIC) has the final say on the approval of the new standard. The committee comprises of 14 members, who have the best available technical expertise internationally. Each member gets one vote and for the approval of a new standard it is required...
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...ACCT 495 Section 2: CASE STUDIES IN ACCOUNTING Research Assignment One Erin M. Bordwell September 29, 2012 Dr. Hossain Fall Quarter 2012 CALIFORNIA STATE UNIVERSITY, LOS ANGELES ACCT 495: Bordwell RESEARCH: Accounting Standard Codification (ASC) 1. FASB had four primary goals in developing the codification. List these four goals: 1) Simplify user access by codifying all authoritative U.S. GAAP 2) Ensure that the codification content accurately represented authoritative US GAAP 3) Mitigate the risk of noncompliance with standards through improved usability of the literature 4) Provide codification research system that is accurate with real-time updates as new standards are released 2. List three SEC authoritative guidance, standard and interpretations included in the codification: 1) Regulation S-X (SX) 2) Financial Reporting Releases (FRR)/Accounting Series Releases (ASR) 3) Interpretive Releases (IR) 3. The accounting literature replaced by the FASB Codification includes (list five): 1) Accounting Research Bulletins (ARB) 2) Accounting Principles Board Opinions (APB) 3) AICPA Accounting Interpretations (AIN) 4) Statements of Financial Accounting Standards (SFAS) 5) FASB Interpretations (FIN) 4. For the following five FASB standards (FAS), provide the corresponding ASC Topic#: FAS 141(R): FAS 52: FAS 13: FAS 133: FAS 115: ! ASC 805 ASC 830 ASC 840 ASC 815 ASC 320 1 ACCT 495: Bordwell 5. Explain the following ASC references: FASB ASC 310-10-05-2: The Overall...
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...The Marketing of Accounting Standards The article “The Marketing of Accounting Standards” by Charles T. Horngren speaks of the decentralization of the Accounting Principles Board. He describes the institutional structure of the APB, speaks of the decentralization management, and the problems facing FASB. The institutional structure of the APB is decentralized, as previously mentioned, which leads to an “informal” organizational relationship. Horngren believes the APB folded because of institutional forces rather than internal disintegration (Horngran 61). He states that in politics Congress has the ultimate power, but delegates some of it to the SEC. In turn, the SEC delegates much of this power to the APB. He speaks of the SEC as a “top management” where they adopt decentralization because lower management, the APB, is believed to have more information and ability to make decisions. With this statement though, Horngren received criticism from an SEC member stating they have a “partnership,” (Horngren 62). Horngren believes that, “the need to study how the exercise of power affects the acceptability of accounting standards,” (Horngren 63). Working as a decentralized management has proven to be difficult as well. The issue with marketable securities is one example. Three issues have occurred: recognition of portfolio gains and losses, do the portfolio gains and losses belong in the income statement, and if market values are disclosed in the balance sheet than there’s...
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...Accounting Standards Codification® Notice to Constituents (v 4.5) About the Codification FASB Accounting Standards Codification® Notice to Constituents (v 4.5) About the Codification Notice to Constituent version numbers - The Notice to Constituents contains a version number indicating the degree of change within a particular version. Versions ending with ".0" represent substantive changes to the text, whereas versions ending with a number other than zero represent editorial or clerical corrections. Page FASB Accounting Standards Codification ................................................................................... 4 Codification Goals .......................................................................................................................... 5 Codification Research System ........................................................................................................ 6 Content Matters............................................................................................................................... 7 Population of codified standards as of July 1, 2009 ................................................................... 7 Standards issued by standard setters other than the SEC ........................................................ 7 Standards issued by the SEC................................................................................................... 8 Essential and nonessential content ................................
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...The International Accounting Standards Board (IASB) is an independent group that was founded in 2001, and the IASB sole purpose is to develop international accounting standards. The have four principles that must be followed, which define an objective of financial statements; identify characteristics to make the information useful; define financial statements; and the concept of capital maintenance (Cellucci, R. 2011). Essentially, the IASB wants multinational corporations to practice the same methods of preparing their financial statements so that there would not be any misinterpretations when reviewing these documents. For instance, if ABC corporation operates in multiple nations, each country will have a different methods when preparing financial statements. This could potential lead to confusion and misunderstanding among anyone reviewing these documents, there is also potential that the information could be misrepresented hindering the company from receiving loans. The goal of the IASB is to step in with the proper procedures and to create a uniform method of accounting procedures. This will create transparency, and eliminate any negligence from operating in different countries. The Financial Accounting Standards Board (FASB) was founded in 1973 with the sole purpose of establishing and improving standards of financial accounting. FASB wants to provide accurate and useful information to investors and other viewers (FASB. 2011). The FASB is recognized only in the United...
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...Convergence of Accounting Standards The need for accounting standards and recordkeeping of financial statements became necessary as economic development became more complex and the rise capital markets became necessary to support economic growth. Financial information is the language businesses use to communicate their capabilities to potential investors, lenders and other users this information. However, for this information to be useful it needed to be reliable, relevant and comparable. These are some of the qualities used in the by the FASB and the IASB to create accounting standards. The FASB and the IASB are the two current bodies in charge of creating accounting standards. The FASB creates standards in the United States and the IASB creates international accounting standards accepted by many international economies. International standards became necessary as many national companies began to engage in international trade. The purpose of these standards was to increase harmonization of international accounting standards to support international economic growth by providing international investors with useful information. Both institutions have evolved throughout the years as financial transactions have become more complicated and new industries developed and evolve. The Financial Accounting Standard Board The FASB evolve from the APB (Accounting Principle Board) that evolved from the CAP (Committee on Accounting Procedures). These organizations developed accounting standards...
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...Accounting Standards Boards ACC/541 Accounting records was found in various parts of the world that are dated several thousand years ago. The world knew how to record their transactions since they knew trade. The more complicated the trading transactions get the more the need for more developed financial recording. In the United States the interest in improving the financial statements started after the great depression. The New York Stock Exchange (NYSE) and the American Institute of Accountants (AIA) met to discuss how to protect the investors. The cooperation between the NYSE and the AIA introduced legislations and two of the most important of those legislations were the Securities act of 1933 and the Securities Exchange Act of 1934 which established the Securities and Exchange Commission (SEC). In 1936 The AIA and the American Society of Certified public Accountants merged together to establish a bigger organization called the American Institute of Certified Public Accountants (AICPA). The AICPA established Committee on Accounting Procedure and the Accounting Principles Board failed to achieve the goals that they were created for. The AICPA appointed two Committees, the Wheat Committee and the Trueblood Committee. The Wheat Committee’s responsibility was to study how financial accounting principles should be established. The Committee’s recommendations were the abolishment of the APB and the establishment of the Financial Accounting Standards Board (FASB). The mission...
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...Accounting Standards Boards Debra McCaster ACC 541 June 27, 2011 Ken Burton Accounting Standards Boards The IASB (Internal Accounting Standards Board) set standards dealing with international accounting and FASB (Financial Accounting Standards Board) has standards dealing with international accounting but they mainly focus on accounting within the United States. The purpose of the convergence is to eliminate the differences dealing with international accounting and to have a much better focus on the consistence of the standards for international accounting. In 2003 FASB and the IASB decided to come together and create a short-term and long-term convergence project to attain a better uniform set of accounting standards. Among the efforts are (1) The FASB’s Short-term international convergence Project, (2) the Norwalk Agreement, and (3) the Roadmap to Convergence (Schroeder, Clark, & Cathey, 2011). The short-term convergence project will consist of nine short-term projects. These projects will consist of segment reporting (ISAB), fair-value option, including investment properties (IASB), borrowing cost (IASB), government grants (IASB), impairment (joint), income tax (joint), joint ventures (IASB), research and development...
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...Accounting Standards Boards Paper Elena Thomas ACC/541 January 10, 2011 Accounting Standards Boards Paper In the 1930’s, the financial community was realizing a need for a uniform accounting standard especially for its publicly traded companies. The SEC was given the authority by the Securities Act of 1933 to create accounting standards and determine the accounting disclosures (M.E. Sharpe, 2006). The SEC deferred to the accounting profession the task of creating auditing standards. The New York Stock exchange and the now American Institute of Certified Public Accountants (AICPA) together published guidelines for audits. In 1971, the AICPA created a committee which was chaired by Francis M. Wheat and comprised of seven members to make recommendations on how to better the accounting principles ("US Financial Accounting Standards Board FASB; IASB and US FASB Complete First Stage of Conceptual Framework," 2010). This committee recommended that a full time board be developed to create set accounting standards. This led to the development of the Financial Accounting Standards Board (FASB) in 1973 within the Financial Accounting Foundation ("US Financial Accounting Standards Board FASB; IASB and US FASB Complete First Stage of Conceptual Framework," 2010). The function of the FASB is to establish and publish the accounting principles. The FASB issues three major types of pronouncements: 1) Standards, Interpretations, and Staff positions 2) Financial Accounting...
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