Accounting standards Accounting Standard and the goals of 2002 Convergence
7/20/2016 RAS Info Ventures Pvt. Ltd|. www.nclt.in
An accounting standard can be defined as a guideline for financial accounting. It covers topics such as how a firm prepares and presents their business income, expenses, assets and liabilities are set in accordance with the International Accounting Standards Board (IASB).
HOW DOES THE FASB SEEK GREATER COMPARABILITY? As we all know, the bilateral convergence program takes place in 2002 by the FASB and the International Accounting Standards Board (IASB) in which the FASB implemented a three-part strategy seeking better comparability in accounting standards internationally: 1. Developing high quality GAAP standards 2. Actively participating in the development of International Financial Reporting Standards (IFRS) 3. Enhancing relationships and communications with other national standards setters. RAS Info Ventures Pvt. Ltd.|www.nclt.in
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DEVELOPING HIGH QUALITY GAAP STANDARDS The FASB had continuously has tried to meet the needs of investors and other GAAP-based financial reports users internationally by improving the quality of GAAP. The FASB believes in high-quality standards as their development will ever influence the shape of international accounting standards, as they have for more than 40 years. Creating high-quality standards and the best standard-setting process, the FASB serves as a reference for other setters.
ACTIVELY PARTICIPATING IN THE DEVELOPMENT OF IFRS The FASB actively participates towards the development of IFRS, giving intel on IASB projects by the IASB’s Accounting Standards Advisory Forum (ASAF) and also by pointing mistakes on past experiences.
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FASB believes that their efforts improve GAAP benefit on the international perspectives. ENHANCING RELATIONSHIPS AND COMMUNICATIONS WITH OTHER NATIONAL STANDARD SETTERS The FASB works to strengthen its existing relationships with other national standard setters. As a result from these relationships, the wide range of information mutually informs each organization’s thinking and contributes to the shared understanding of perspectives and circumstances that can avoid unnecessary differences among standards used throughout the world. The FASB might conclude that its own capital markets outweigh the goal of forming completely converged accounting standards.
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