The Impact of the Fasb/Iasb - “Financial Statement Presentation Project”

In: Business and Management

Submitted By pumpkin0702
Words 1238
Pages 5
The Impact of the FASB/IASB - “Financial Statement Presentation Project”
The objective of project–
The objective of the financial statement presentation project is to establish a global standard that will guide the organization and presentation of information in the financial statements. Nowadays, the globalization of financial markets is increasing dramatically. In order to assist investors, creditors, and other financial statement users to better understand the entity’s financial situation and to help users in their decision-making , it is necessary for the financial statements to be state on a common accounting framework. The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) are working on converging U.S. Generally Accepted Principles (US GAAP) and International Financial Reporting Standards (IFRS).
The goal of the “Financial Statement Presentation Project” is to consolidate the presentation of basic financial statements and format presented by a business entity, including the classification and display of line items and the aggregation of line items into subtotals. The following sections will outline the important changes in the new presentation for four major statements and finally arrive at a conclusion of the establishing of a new, common and high-quality standard presentation. structure of financial statement
The complete set of financial statement in the project includes following statement: statement of financial position (balance sheet), statement of comprehensive income, statement of cash flows and the reconciliation statement. But the key changes fall into the structure of financial statement, including business section, financial section, income tax section , discontinued operation and multicategory section. The business section includes assets and liabilities that relate to income…...

Similar Documents

Fasb & Iasb Relationship

...writer; they are not infallible statements of right/wrong, and they should not be used as grading elements. Also, at present, WritePoint cannot detect quotations or block-quotes, so comments in those areas should be ignored. Please see the other helpful writing resources in the Tutorials and Guides section of the Center for Writing Excellence. Thank you for using WritePoint. The IASB and FASB have collaborated for the past 10 years. This collaboration was a goal toward convergence of U.S. generally accepted accounting principles (GAAP). The convergence project began with the two organizations conducting a joint meeting in Norwalk, Connecticut, on September 18, 2002. The goal for creating the convergence project was for the “development of high-quality compatible accounting standards that can be used for both domestic and cross-border financial reporting. They also promised to use their best efforts to make their existing financial reporting standards compatible as soon as practicable and to coordinate their future work programs to maintain compatibility” (Schroeder, Clark & Cathey, p. 95). Since 2002, the two boards have described what convergence means and their tactics to achieve it in fulfilling those goals through the Memorandum of Understanding between the IASB and the FASB. The main way the FASB and IASB collaborate is through joint projects to develop common standards (FASB,......

Words: 1423 - Pages: 6

Fair Value Project Summary of Iasb and Fasb

...Project Summary Background The objective of this project is to provide guidance to entities on how they should measure the fair value of assets and liabilities when required by other Standards. This project will not change when fair value measurement is required by IFRSs. Discussion at the September 2005 IASB Meeting At the September 2005 meeting, the IASB added the Fair Value Measurements topic to its agenda. The aim of the project is to provide guidance to entities on how they should measure the fair value of assets and liabilities when required by other Standards. This project will not change when fair value measurement is required by IFRSs. Discussion at the November 2005 IASB Meeting The staff conducted an education session on the FASB's working draft of a final Statement on Fair Value Measurements. In addition, the staff reviewed the scope of FASB's Fair Value Measurements project as it relates to IFRSs and the issues and questions to be addressed in preparing an IASB Exposure Draft and related Invitation to Comment. No decisions were made. At a previous meeting, the Board decided to issue the FASB's final Statement on Fair Value Measurements as an IASB Exposure Draft with an Invitation to Comment. The appendices in the FASB document dealing with consequential amendments and references to US GAAP pronouncements will be replaced with proposed consequential amendments and references to IFRSs. The Board further decided that there should be limited changes to the......

Words: 21364 - Pages: 86

Fasb Ongoing Project

...| FASB Project | ACCT 495-6260 | | Mallory Taylor | 4/26/2013 | | U.S. GAAP and IFRS: History of Convergence The business environment today is one of a truly global perspective. There are few businesses left in this world that does not conduct business on an international basis. The need for a universal accounting system is a direct result of the magnitude of international business. Investors, managers, CEOs, and virtually all stakeholders need to understand the accounting information of the other businesses they interact with, regardless of the country or region of the world that business is located. “The effort to join the international financial community in a single set of standards has been in motion for over 40 years. The International Accounting standards Committee was formed in 1973. This committee evolved into the International accounting Standards Board (IASB) in 2001. International security regulators supported accounting regulators in the call for universal standards” (Thomas, 2009, p. 369). “The regulators in the U.S. have been slow to join the efforts for global convergence. In 2002, the Financial Accounting Standards Board (FASB), which issues U.S. GAAP, and the International Accounting Standards Board entered into the Norwalk Agreement. This agreement acknowledges their commitment to high quality accounting standards for use domestically and across borders. This agreement aims to remove the differences between U.S. GAAP and IFRS......

Words: 2524 - Pages: 11

Relationship Between the Iasb and the Fasb

...Relationship between the IASB and the FASB ACC 541 Relationship between the IASB and the FASB The United States plays an enormous influence on the accounting standards set forth throughout the world in the global economy. The United States follows the Financial Accounting Standards Board (FASB) which has created a large number of accounting standards that are interpreted and accepted by international companies and by the International Accounting Board (IASB). The IASB plays a similar role like the FASB for the rest of the global economy. The IASB is located in London, England and is an independent, privately funded accounting standard-setter. The IASB board consists of members from nine different countries with the IASB’s sole purpose to ‘achieve convergence in accounting standards throughout the world’ (Cellucci, 2011). The IASB and FASB have been collaborating since 2002. This collaboration was derived to create a convergence of the United States Generally Accepted Accounting Principles (GAAP). The convergence project started when the two organizations met during a joint meeting in Norwalk, Connecticut on September 18, 2002. The two board’s goal for the convergence project was for developing a high-quality compatible accounting standards that can be used for both domestic and cross-border financial reporting. They also promised to use their best efforts to make their existing financial reporting standards compatible as soon as practicable and to coordinate their...

Words: 1324 - Pages: 6

Iasb and Fasb

...Running head: THE IASB AND FASB The IASB and FASB Amber Lynch ACC/541 Week 1 Paper March 10, 2014 The IASB and FASB 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......

Words: 1122 - Pages: 5

Revenue Recognition Within the Iasb and Fasb

...Revenue Recognition within the IASB and FASB Revenue Recognition within the IASB and FASB Revenue is a critical number to any user of financial statements in determining an organization’s financial position and performance. Although this is the case, there are many differences between revenue recognition for U.S. GAAP (Generally Accepted Accounting Standards under the FASB) and IFRS (International Financial Reporting Standards under IASB). Along with these differences comes need for improvement in both reporting methods. IFRS has fewer requirements for revenue recognition in comparison to U.S. GAAP, and is made up of two central revenue recognition standards: IAS 18 (revenue) and IAS 11 (construction contracts). These standards are said to be fairly difficult to apply and understand, and give little guidance on important topics for users. On the other hand, U.S. GAAP is made up of a very wide range of revenue recognition concepts and has countless requirements for specific transactions and specific industries. This makes is very difficult for users to apply these reporting standards and makes it even harder for users of these financial statements to determine the entity’s performance, as accounting for different transactions and industries can result in different numbers for economically similar situations. IFRS may not be perfect, but overall I believe it provides a simpler and more user-friendly set of accounting standards for revenue-recognition than U.S.......

Words: 2239 - Pages: 9

Comparison of Fasb &Iasb

...Mr. James Leisenring, who is a FASB Senior Advisor, makes a presentation about the conceptual framework on Thursday. He expressed some views in this presentation are on his own and do not necessarily represent official position of the financial accounting standard board. Official position of the FASB Board is arrived at only after extensive due process and deliberations. In class, we learned that the conceptual framework is making up with objective, qualitative characteristics, constraints; elements, recognition measurement and disclosure concepts, and financial statement elements which are provide guidance to standard setting. In our text book, the conceptual framework has been described as an “accounting constitution” because it provides the underlying foundation for US accounting standard. And more formally, it is a coherent system of interrelated objectives and fundamental that is intended to lead to consistent standard and that prescribes the nature, function, and limits of financial accounting and reporting. Mr. Leisenring comes up with some different views and concerns of some aspect of the concept framework in his presentation. For example, he talks about the definition of assets liabilities and revenue and expenses, on his view, Mr. leisenring concerns the definition of those concept are kind of vogue and uncertainty. There is no discussion of what items that are not resources or obligations should be recognized or what would be the basis for recognition. He talks......

Words: 564 - Pages: 3

Financial Reporting and Standard Setting by the Sec, Fasb, Iasb, and, Gasb

...Financial Reporting and Standard Setting by the SEC, FASB, IASB, and, GASB Abstract In the accounting industry there are different organizations that have been established to design, implement, and oversee accounting standards and financial presentation processes. Such organizations include the Securities Exchange Commission, SEC, the Financial Accounting Standards Board, FASB, the International Accounting Standards Board, IASB, and the Governmental Accounting Standards Board, GASB. Each of these organizations works closely with the others to attempt to provide the accounting industry with a similar, if not identical, set of accounting standards that align with those of the U.S. GAAP – Generally Accepted Accounting Principles and IFRS – International Financial Reporting Standards. The strengths and weaknesses of these organizations identify their similarities and differences and enable the organizations to continue to grow with the finance and accounting industries. In the accounting industry there are several different organizations specifically designed to set, maintain, and regulate accounting standards and financial statement presentation. Among these organizations are the U.S. Securities and Exchange Commission, or SEC, the Financial Accounting Standards Board, or FASB, the International Accounting Standards Board, or IASB, and the Governmental Accounting Standards Board, or GASB. Each organization was......

Words: 1963 - Pages: 8

Financial Statement Presentation

...To: FASB / IASB From: Billy Leigh Re: Proposed Changes to Financial Statement Presentation Dear Members of IASB / FASB, As I understand it, the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) are proposing a joint venture to change the presentation of financial statements. I appreciate the opportunity to comment on the proposed changes. It is in my humble opinion that the current requirements for financial statement presentation allow for too many alternative ways to present the same events or activities. In addition, the information presented is often too aggregated for financial statement users to gain any real insight into a company’s financial position. Because users of financial statements interpret valuable information from these documents, it is of the utmost importance that both the FASB and IASB ensure that this information is as consistent and detailed as possible. This increase in detail and consistency will better allow users of financial statements to fully understand the relationship between an entity’s financial statements and financial results. (1) It should be expected that changes to an established system would be met with some dismay from both preparers and users of financial statements. The increased time and cost it will take to prepare financial statements, as well as peoples’ reluctance to accept change will make this transition difficult. However, once these changes have gained......

Words: 1208 - Pages: 5

Fasb vs. Iasb

...FASB VS. IASB - Convergence Project Shenita Baker ACC541 November 15, 2011 Delphine Wolsker FASB VS. IASB - Convergence Project The Financial Accounting Standard Board (FASB) is located in the United States and was formed in 1973 as a private sector to establish guidelines for financial accounting. These standards command the arrangement of financial reports by nongovernment bodies. The Financial Accounting Standard Board has only 5 members. The FASB standards are known by The American Institute of Certified Public Accountants and the Securities and Exchange Commission. The Financial Accounting Standard Board encourages participation, stakeholder’s outlook, and the attention by the Financial Accounting Foundation’s Board of Trustees. The FASB also controls the FASB Accounting Standards Codification which acts as the connection of valid standards of accounting and reporting. The International Accounting Standards Board (IASB) is a self-sufficient group that contains 15 members located in London. The International Accounting Standard Board ha experience in auditing, preparing, and using financial reports. The IASB also help decide accounting guidelines . The IASB is part of the IFRS foundation came about in 2001. The board is funded by major accounting firms and private financial institutions. The International Accounting Standard Board and the Financial Accounting Standards Board are currently working on a joint venture known as the......

Words: 496 - Pages: 2

The Relationship Between Iasb and Fasb

...Relationship between IASB and FASB Doris Edwards ACC/541 – Accounting Theory and Research Instructor - Leslie Crews, JD, MBT March 28, 2011 Financial Accounting Standards Board History The Financial Accounting Standards Board (FASB) is a private sector organization that was established in 1973. The FASB is governed by the Financial Accounting Foundation (FAF). The FAF appoints the members of the Financial Accounting Standards Advisory Council (FASAC), the council is the entity that informs the FASB of pressing issues or topics to be reviewed (2003, Webster’s). The goal of the FASB is to set standards for financial accounting practices and the production of financial reports. The FASB works to ensure that financial reporting is; transparent, reliable, relevant, comparable, and consistent. It is the responsibility of the FASB to regularly review standards, to check for deficiencies within the current standards, and to also look for methods to improve reporting based on current day needs. As set by Section 108 of the Sarbanes-Oxley Act any standard set by the FASB is recognized to be “generally accepted” for the purpose of the federal securities laws (Schroeder, 2011). The FASB initially issued standards through two different types of pronouncements, these are more commonly known as Statements of Financial Accounting......

Words: 1173 - Pages: 5

Fasb vs Iasb

...between FASB and IASB Carolina Camacho-Collier ACC/541 June 6, 2011 Heber W. Howard Abstract This report has been made to explain the direct relationship that the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) have and how crucial the unification of these two setting standards entities are in these current days, where financial transactions are expected to perform globally. In addition, it is important to have a Master of Science in accountancy in order to prepare professionals in accounting to provide reliable information for this new environment of economic and financial transactions. The Financial Accounting Standards Board (FASB), a non-governmental entity, was created in 1973, after the wheat committee decided to abolish the Accounting Principles Board (APB) as a result of criticism against the objectivity of members. The FASB consists of seven members, which are selected for renewable periods of five year terms with well-paid full time positions. This entity receives funding from the Securities of Exchange Committee (SEC). According with Kieso, Weigandt and Warfield (2007), the purpose of FASB is “to establish and improve standards of financial accounting and reporting for the guidance and education of the public, which includes issuers, auditors, and users of financial information.” The International Accounting Standards Board (IASB) is a private entity formed in 1973, based in London, England. The IASB......

Words: 1134 - Pages: 5

History of the Relationship Between Fasb & Iasb

...Running head: RELATIONSHIP OF IASB AND FASB The Relationship of the International Accounting Standards Board and the Financial Accounting Standard Board Accounting Theory & Research 541 The History & Relationship of the International Accounting Standards Board and the Financial Accounting Standard Board The International Accounting Standards Board (IASB), and independent standard-setting body of the IFRS Foundation was created after the Financial Accounting Standards Board (FASB) to develop and establish universal accounting procedures and standards for both boards. In recent years however, there has been significant shifts in the relationship between both entities given various considerations. Currently, IASB and FASB are working on a joint venture referred to as the convergence project, in hopes of eliminating a variety of differences between International Financial Reporting Standards and U.S. Generally Accepted Accounting Principles. It is further my intent to provide a brief history of the relationship between the two aforementioned entities as well as briefly address the importance of the prescribed course of study within the University of Phoenix’s Master of Accountancy program for individuals who are pursing professions within the field of accounting. History In 1973, FASB was born of the Financial Accounting Foundation (FAF) to generate and rectify practices of financial accounting and reporting for nongovernmental businesses. This......

Words: 1640 - Pages: 7

Convergence of Fasb and Iasb

...1. Convergence Project is undertaken by the IASB and the FASB jointly aiming at removing the differences between the two sets of accounting Standards, the GAAP and the IFRS. In other words, the main purpose of the project is to make the accounting standards of both the IASB and the FASB comparable so that there will be a global used accounting standard. (Deegan 2010, p49) This project will make international financial reports more comparable and more helpful for information users. The development of Conceptual Framework is a basic requirement for the changes of accounting standards. With the international convergence of financial framework, a more developed common framework is required to provide a basis for the IASB and the FASB to develop high quality common standards, to eliminate differences between the two sets of standards and to seek to replace weaker standards with stronger standards; Therefore the development of conceptual framework project is a basic need for the conducting of convergence project. In addition, the convergence project will lead professionals to realize the change of information demand and financial system. Because of these changes, the conceptual framework, being developed two decades ago, need to be evolved. (Deegan 2010, p49) Otherwise the current conceptual framework will not be helpful to issue a common set of principle-based standards. (IASB 2005) 2. TT * Limitation to meet current financial environment. The conceptual frameworks......

Words: 1488 - Pages: 6

Active Joint Fasb / Iasb Projects

...In 2002 the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) met and issued the Norwalk Agreement where they both agreed to develop of high quality accounting standards. Since that time the FASB and the IASB have been working on joint projects a.k.a convergence projects designed to improve both US Generally Accepted Accounting Principles (US GAAP) and International Financial Reporting Standards (IFRS), eliminate differences between them, and ultimately make the standards fully compatible. In 2010, to increase efficiency the boards decided to focus on the priority projects. Two of those projects, fair value measurement and statement of other comprehensive income, are poised for release. Now, the “big three” remain—financial instruments, revenue recognition, and leases. The IASB is also working to its monster project on insurance contracts, with the FASB closely engaged in the discussion. Therefore, bellow is the list of the active joint FASB/IASB projects according to current technical plan on the fasb.org website: - Accounting for Financial Instruments (Updated November 10, 2011): • Classification and Measurement (Updated November 10, 2011); • Impairment (Updated November10, 2011); • Hedging (Updated November 10, 2011). - Revenue Recognition (Exposure Draft issued November 14, 2011); - Leases (Updated November 15, 2011); - Balance Sheet – Offsetting (Updated August 15, 2011); - Consolidation: Policy and Procedures......

Words: 5016 - Pages: 21

Cell Phones, Communication and Avoidance | Homevideo | Barbie et la Magie des Dauphins Streaming HD Barbie et la Magie des Dauphins Streaming Full-HD Barbie et la Magie des Dauphins Streaming HD [1080p] gratuit en illimite - Barbie et ses sœurs partent pour une nouvelle aventure passionnante : elles rendent visite à leur ami Ken près d’un récif de corail magnifique et exotique. Tandis qu’elles explorent des merveilles du récif, Barbie et ses sœurs découvrent aussi les ...