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Accounting Standards

In: Business and Management

Submitted By austen09
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Hi I’m austen and I will tell you about the proposal of a 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 that no more than four members of the committee oppose the new standard. If 10 or more members approve the new standard it becomes an International accounting standard. Countries may then adopt this standard. Although it is not a requirement it does bring harmonisation within the accounting world.

In May 2008 the International...

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