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Iasb and Fasb

In: Business and Management

Submitted By toughma1027
Words 1122
Pages 5
Running head: THE IASB AND FASB

Amber Lynch
Week 1 Paper
March 10, 2014

Although the concept of the convergence of accounting standards is a new concept to some the idea has existed since the 1950’s. This idea came about as a solution for economic integration and the uptick in international business operations. When the project was first constructed it focused mainly on harmonizing the differences in principles that existed across many different capital markets throughout the world. The idea of harmonization remained in place until the 1990’s when the concept of convergence became the new priority. The concept of convergence centers on the concept of creating one set of accounting standards that would be used across all of the major financial markets in the world (FASB, n.d.). In order for this set of accounting standards to be uniform it requires the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) to work together towards the creation and implementation of the standards.
The FASB has been the organization in charge of establishing the standards for financial accounting in the private sector within the United States since 1973 (FASB, n.d.). These standards are formally recognized by both the Securities and Exchange Commission and the American Institute of Certified Public Accountants (FASB, n.d.). They are more commonly known as Generally Accepted Accounting Principles or GAAP. The standards that are developed by the FASB are essential to maintaining the overall health of our economy as they help to ensure the financial information that is used to make decisions is credible, understandable, and concise (FASB, n.d.).
The IASB, formed in 1973, is a body of 16 full-time members that is responsible for the publication and development of the International...

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