What is the objective of the joint FASB IASB convergence project?
The objective of this project is to eliminate a variety of differences between International Financial Reporting Standards and US GAAP. The project, which is being done jointly by FASB and IASB, grew out of an agreement reached by the two boards in October 2002 (the ‘Norwalk Agreement’).
Which of the following is a phase of the joint FASB and IASB Conceptual Framework project?
The eight phases of the joint FASB and IASB framework project are: 1) objective and qualitative characteristics, 2) elements and recognition, 3) presentation and disclosure, 4) reporting entity, 5) measurement, 6) framework for GAAP hierarchy, 7) applicability to the not-for-profit sector, and 8) any remaining issues …
Do the FASB and IASB work together?
However, since many companies operate globally, the IASB and FASB often work together to contribute toward global accounting standards. The FASB also actively participates in the development of IFRS, providing input on IASB projects using the IASB’s Accounting Standards Advisory Forum (ASAF) and other means.
What is the difference between FASB and IASB?
The IASB deals with the development of International Financial Reporting Standards and promoting the application of these standards. The FASB is a no-profit organisation, which caters to the development of Generally Accepted Accounting Principles (GAAP) in the interest of the public.
What is the difference between harmonization and convergence?
Harmonisation refers to all the efforts aimed at reducing diversity in accounting practices across the globe while convergence refers to measures adopted by individual countries in the course of moving from national GAAP to IFRS.
What is IASB conceptual framework?
The Conceptual Framework states that only items that meet the definition of an asset, a liability or equity are recognised in the statement of financial position and only items that meet the definition of income or expenses are to be recognised in the statement(s) of financial performance.
What is the FASB conceptual framework project?
The Conceptual Framework is a body of interrelated objectives and fundamentals that provides the FASB with a foundation for setting standards and concepts for it to use as tools for resolving accounting and reporting questions.
Will GAAP and IFRS converge?
The Securities and Exchange Commission (SEC) reaffirmed its support for the convergence of U.S. Generally Accepted Accounting Principles (U.S. GAAP) and International Financial Reporting Standards (IFRS) in its “Commission Statement in Support of Convergence and Global Accounting Standards” in February 2010.
What is convergence with IFRS?
In general terms, convergence means crossing over any barrier between the two, i.e. the IFRS and the Indian AS. Convergence will include an arrangement of the two sets of standards. The trade-off is finished by embracing the policies of the IFRS either completely or in a part.
What is the relationship between IASB and IFRS?
The IAS was a set of standards that was developed by the International Accounting Standards Committee (IASC). They were originally launched in 1973 but have since been replaced by the IFRS. IFRS is a set of standards that was developed by the International Accounting Standards Board (IASB).
Is FASB same as IASB?
The main difference between IASB and FASB is that IASB is based in London while FASB is based in the United States. IASB develops and issues financial reporting standards. FASB sets the highest quality standards which are known as Generally Accepted Accounting Principles (GAAP).
What is the difference between IASB and IFRS?
IAS and IFRS are the same. International Accounting Standard Committee issued IAS till 2001. IASB replaced IASC in 2001. IFRS refers to the new numbered series of pronouncements that the IASB is issuing,as distinct from the International Accounting Standards (IASs) series issued by its predecessor.
What is IASB Conceptual Framework?
What is the objective of harmonization?
The objective of harmonization is to move accounting and reporting away from total diversity by making a commitment to find shared solutions, but at the same time recognizing that inherent differences would still exist. Harmonization is a process of change that continuously searches for mutual recognition.
What is the main objective of the IASB?
IASB’s objectives Under the IFRS Foundation Constitution, the objectives of the IASB are: to develop, in the public interest, a single set of high quality, understandable, enforceable and globally accepted financial reporting standards based upon clearly articulated principles.
Is GAAP a conceptual framework?
Conceptual frameworks can apply to many disciplines, but when specific ally related to financial reporting, a conceptual framework can be seen as a statement of generally accepted accounting principles (GAAP) that form a frame of reference for the evaluation of existing practices and the development of new ones.
What are the four GAAP principles?
Four Constraints The four basic constraints associated with GAAP include objectivity, materiality, consistency and prudence. Objectivity includes issues such as auditor independence and that information is verifiable.
What is convergence of IFRS?
Will US Join IFRS?
As a result of all of these factors, it appears that full adoption of IFRS by the US is very unlikely, and convergence between GAAP and IFRS, though it is slowly being worked towards, will not be realized for a very long time.
What is difference between convergence and adoption of IFRS?
Adoption means using IFRS as issued by IASB. Convergence means that the Indian Accounting standard board and IASB would continue working together to develop high quality, compatible accounting standard over time.
Should GAAP and IFRS converge?
U.S. GAAP preparers have an option to slow the recognition of stock compensation expense that IFRS preparers do not. Despite their best efforts, full convergence appears unlikely in the near term. Therefore, it is important for preparers and investors to understand the differences between the two frameworks.
What is the difference between IAS and IASB?
One of the major differences is that the series of standards in the IAS were published by the International Accounting Standards Committee (IASC) between 1973 and 2001, whereas, the standards for the IFRS were published by the International Accounting Standards Board (IASB), starting from 2001.