Accounting Standards Boards Essay Example | Topics and Well Written Essays - 1000 words

Accounting Standards Boards - Essay ExampleThis convergency was make in order to improve the two main US accounting principles i.e. IFRA and GAAP. China and Japan as well worked in this coverage of two squealerds. In accordance with the 2010 motifs, the Securities and Exchange Commissions have issued a statement of global accounting standard and convergence in order to direct the SEC staff. This was do to make a work plan which should be used to incorporate IFRA standards in US monetary reporting system (Colson, Robert H, 2003, p.22). A brief history on the relationship of these two boards is described beneath Interest of world-wide accounting began in 1950s due to the integration of World War II and due to the increase of capital flaws in the systems. An world-wide congress of accountant was hosted by American initiate of Certified Public Accountants in 1962. It discussed the steps for the development of accounting, auditing and other reporting standards. The first textbo ok of international accounting was published in 1967 which was written by a member of FASB. IASB and FASB relationship was informal one. scarcely in 1988 FASB became a member of IASC which meant that FASB was able to participate in the meetings of IASC. In 1993 FASB and its counter party conducted a joint venture project. This resulted in the improvement of in the relationship and standards of these two boards. In 2000 use of international accounting standards increased rapidly due to which IASB and FASB decided to collaborate and explore US international standards. IASB and FASB eventually decided to collaborate and work together in order to improve the US accounting standards. This fusion has been mentioned in The Norwalk Agreement. A memorandum of understanding was issued by twain of the boards in 2006. It described the targeted performance they promise to achieve by 2008. In this MOA they shared their common objective with high quality accounting standards. twain the boards completed the first joint project and issued a converged accounting standard on business combining in 2007. FASB and IASB updated its memorandum of understanding in 2008 in order to establish convergence goals of 2011. FASB reported the spatial relation of their project in order to converge and improve UC GAAP accounting standards in 2010. First ninny congress report was issued by both the boards which reported modification of their joint work plan. A bestride report was issued by both the boards in 2011. It reported the progress of the convergence work program. In this report it gave priority to the three main areas i.e. leasing, financial instrument and revenue recognition. 1.2 IASB equivalents of the FASB original pronouncements FASB and IASB mainly establish standards in relation to finance and accounting which helps nongovernmental organizations to prepare financial statements. FASB major pronouncement is to develop the principles of general accounting, piece IASB focuses on international financial reporting analysis. This indicates that IASB is not equivalent of the pronouncements of the other board. There exists difference in the practices of both the boards. FASB uses a rule based approach, which differs from the principles of IASB it focuses on techniques, processes and organization. In spite of these differences in the original pronouncement, both the boards have agreed to converge for the best interest of financial economy. This means that the main reason of the convergence was to set universal standards of accounting. In order to reduce these differences meetings were conducted by auditors to ensure the success of both the boar