Accounting Standards Paper

In: Business and Management

Submitted By alona21
Words 1723
Pages 7
Accounting Standards Boards

Cherish Malbrue

Accounting 541

July 2, 2012

Bethany Kessel

Accounting Standards Boards

The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) began their joint commitment in 2002 to improve both generally accepted accounting principles (GAAP) and International Financial Accounting Standards (IFAS). The mission of these two boards is to try to make both methods of accounting standards as compatible as possible. The two boards are trying to come to a common denominator that will allow use for both domestic and cross-border financial reporting. The FASB and IASB are also working on a number of individual standard issues to help make FASB and IASB standards more compatible (Schroeder, Clark, & Cathy, pp. 79, 2011). The two boards were sure to have these projects completed by the end of 2011.

Brief History of the Two Boards

The concept of international convergence first arose in the late 1950s in response to post World War II economic integration and related increases in cross-border capital flows (“International Convergence Of Accounting Standards-Brief History”, n.d.). Convergence replaced harmonization in the 1990s, which is a high set of standards to be use in almost all the major capital markets. More than one hundred countries require or permit the use of IFAS. Since 1973, FASB has been the designated organization in the private sector for establishing standards of financial accounting and reporting in the United States (FASB and IASB Agree To Work Together Toward Convergence Of Global Accounting Standards”, 2002). These standards (GAAP) assist with the preparation of financial statements used by creditors, investors, etc. The IASB, based in London, began operations in 2001 and is committed to developing a single set of high…...

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