FASB Works Toward Global Convergence

FASB Works Toward Global Convergence - Article from The...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the first in a series of articles on the subject of convergence of global accounting standards. Convergence of global accounting standards has received a great deal of attention as of late. In October, the FASB and the International Accounting Standards Board (IASB) announced an agreement to work together toward convergence. This article will explore the strategies, policies and procedures in place at the FASB to facilitate convergence of U.S. standards with those of the IASB, including actions taken by the Board in October to accelerate the process of convergence. Specifically, the Board authorized its staff to conduct a research project to identify and catalog all of the substantive differences between U.S. generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRS), which includes International Accounting Standards (IAS). At the same time, the Board formally added a project to its active agenda to address some specifically identified differences in the short term. Those two projects are discussed in detail below. Comprehensive Research Project The FASB staff is currently working on a research project related to convergence. The project seeks to identify all of the substantive differences between U.S. GAAP and IFRS and to catalog those differences according to the Board’s strategy for resolving them. The project scope includes differences in standards addressing recognition, measurement, presentation or disclosure. Any instance in which a specific accounting treatment would be permissible under one basis of accounting but would not be permissible under the other basis of accounting is included in the project scope. The FASB staff, the IASB staff and many research and professional organizations have already identified many differences in conjunction with work on other projects. Several comprehensive comparisons have been published. Through the convergence research project, the Boards will validate and complete that work. Once completed, the database of differences will be continuously monitored and updated as new differences arise and existing differences are resolved. Thus far, the staff has identified three possible strategies for resolving differences between U.S. GAAP and IFRS. Many differences are expected to be resolved as both Boards deliberate the major projects currently on their respective agendas. For example, there are many differences related to revenue recognition, business combinations and financial performance reporting that are within the scope of one of the projects currently being conducted jointly or simultaneously by the Boards. As the FASB and IASB comprehensively reconsider the existing guidance in each of those areas with the dual objectives of seeking a high-quality solution and furthering convergence, differences in those areas should be substantially reduced or eliminated. Similarly, there are many differences that exist today simply
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/21/2009 for the course ACC acc 310 taught by Professor Mlot during the Fall '09 term at N.C. State.

Page1 / 3

FASB Works Toward Global Convergence - Article from The...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online