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,***, ', fr Cf we#l rl rgf il i t/i,) a a''{' [t,l/n filw e",i il,",,,y. V Chapter 11 lnternational Financial Reporting Standards V 554 GAAP HIERARCHY-U.S. VERSUS IFRS ln discussions betweenthe FASB and IASB on developing a joint conceptual lramework, the lirst issue debated was whether the obiective should be to provide intormation to a wide range ol usets or only to existing shareholders. They agreed that information should be provided to all users making risky investmenls. GAAP Hierarchy refers to how an entity identifies the sources of accounting princi- ples and the franrework for selecting the principles used in preparing financial statements. The objective of the GAAP hierarchy is to pror-ide a consistent frame- rvork for selecting accounting principles to be used in preparing- financial state- ments that are presented in conformiq' with U.S. generally accepted accounting principles. Generally, the hierarchy contains multiple levels with the highest level given the most weight. Most standard setters have a stated hierarchy to guide pre- parers of the financial statements. On fune 30, 2009, the FASB issued its final statement in therSE S series: SE4S No. 158, The I1,SB Accounting Standarcls Cod.ificationrM and the Hierarchy of Generatll Accepted Accounting Principles-a replacement of FASB Statement No. 152. As of the effective date of this pronouncement (annual and interim periods ending after September 15, 2009), the FASB Accounting Standards Codification (ASC) became the source of authoritative accounting and reporting standards for non-govern- mental entities in the US. In essence this statement reduced the GAAP hierarchy to two levels: one that is authoritative (included in the FASB ASC) and one that is non-authoritative (not included in the FASB ASC). The exception would be all rules and interpretations issued by the SEC which are also sources of authorita- tive GAAP for SEC registrants. FASB Statement No. 168 is the final statement is- sued by the FASB in ... View Full Document

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