...International Convergence of Accounting Standards Standardization is a common theme across many sectors as the world continues an ever developing push towards globalization. This globalization requires the economic integration of nations into an international economy. In order to achieve integration it was recognized that there needed to be a standardized accounting system for financial information to be exchanged and interpreted. Thus, a goal and a path were developed to obtain the International Convergence of Accounting Standards. To understand the International Convergence of Accounting Standards knowledge is needed of its meaning, the roles of the IASB and FASB, it's history, where the world is in its process, futures plans, its benefits, and what the International Convergence means for Accounting in the US. Meaning of International Convergence of Accounting Standards: The FASB believes that the goal of convergence is to establish an exclusive set of reputable, international accounting standards. Convergence allows for companies both domestic and internationally to use the same standards for financial reporting. The path needed to develop such standards involves the FASB and the IASB to facilitate their efforts to improve upon the U.S. generally accepted accounting principles and the International Financial Reporting Standards and eradicate the differences between the two. Description of IASB & FASB and their roles: The International Accounting Standards Board...
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...International Journal of Accounting & Information Management The role of corporate governance in convergence with IFRS: evidence from China Yu Chen Zabihollah Rezaee Downloaded by UNIVERSITI MALAYSIA SABAH At 05:16 06 October 2015 (PT) Article information: To cite this document: Yu Chen Zabihollah Rezaee, (2012),"The role of corporate governance in convergence with IFRS: evidence from China", International Journal of Accounting & Information Management, Vol. 20 Iss 2 pp. 171 - 188 Permanent link to this document: http://dx.doi.org/10.1108/18347641211218470 Downloaded on: 06 October 2015, At: 05:16 (PT) References: this document contains references to 50 other documents. To copy this document: permissions@emeraldinsight.com The fulltext of this document has been downloaded 1824 times since 2012* Users who downloaded this article also downloaded: Songlan Peng, Kathryn Bewley, (2010),"Adaptability to fair value accounting in an emerging economy: A case study of China's IFRS convergence", Accounting, Auditing & Accountability Journal, Vol. 23 Iss 8 pp. 982-1011 http://dx.doi.org/10.1108/09513571011092529 Randy Moser, (2014),"IFRS and convergence in China and the USA", Journal of Technology Management in China, Vol. 9 Iss 1 pp. 56-66 http://dx.doi.org/10.1108/JTMC-12-2013-0042 Ronita D. Singh, Susan Newberry, (2008),"Corporate governance and International Financial Reporting Standard (IFRS): The case of developing countries", Research in Accounting in...
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...IAS 40 International Accounting Standard 40 Investment Property This version includes amendments resulting from IFRSs issued up to 31 December 2010. IAS 40 Investment Property was issued by the International Accounting Standards Committee in April 2000. In April 2001 the International Accounting Standards Board (IASB) resolved that all Standards and Interpretations issued under previous Constitutions continued to be applicable unless and until they were amended or withdrawn. In December 2003 the IASB issued a revised IAS 40. Since then, IAS 40 and its accompanying documents have been amended by the following IFRSs: • • • • • • • IFRS 2 Share-based Payment (issued February 2004) IFRS 4 Insurance Contracts (issued March 2004) IFRS 5 Non-current Assets Held for Sale and Discontinued Operations (issued March 2004) IAS 1 Presentation of Financial Statements (as revised in September 2007)* Improvements to IFRSs (issued May 2008)* IFRS 9 Financial Instruments (issued November 2009)† IFRS 9 Financial Instruments (issued October 2010).† * † effective date 1 January 2009 effective date 1 January 2013 (earlier application permitted) © IFRS Foundation A1003 IAS 40 CONTENTS INTRODUCTION paragraphs IN1–IN18 INTERNATIONAL ACCOUNTING STANDARD 40 INVESTMENT PROPERTY OBJECTIVE SCOPE DEFINITIONS RECOGNITION MEASUREMENT AT RECOGNITION MEASUREMENT AFTER RECOGNITION Accounting policy Fair value model Inability to determine fair value reliably Cost model TRANSFERS...
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...Therefore, a standardised accounting standard should be introduced and follow by the companies all around the world in recording their financial statements in order to facilitate the investors in doing their business. International Financial Reporting Standards (IFRS) and US generally accepted accounting principles (GAAP) are two main accounting principles that is widely used in the majority of the companies. However, there will be still conflict in the interpreting and understanding each other financial statements due to these two different approaches. Therefore, to overcome this problem, International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) are working on it by taking the necessary steps as time passes to close down the gap and standardised the accounting principles globally making it easier for all parties. (157 words) 1.0 Introduction In the world of globalization, a number of countries had been experiencing the convergence of their local GAAP and IFRS in order to apply the international accounting standard to suit the growing business world. This does not left out the people of the United States who are also trying to converge the accounting standards of US GAAP and IFRS in order to close down the gap between the accounting standards. FASB and IASB are the main international bodies assisting the Securities and Exchange Commission (SEC) to achieve this goal. 2.0 Benefits 2.1 Facilitate international business and economy growth...
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...Convergence Project Financial Accounting Standards Board and International Accounting Standards Board By: Lydia Ferdin Our world is changing and sometimes in business, there are times when we must change our policies, standards, and guidelines as well to keep up with the natural changes in our environment. This leads to the idea of convergence as it relates to accounting. One of the world’s greatest naturalist and Greek professor Heraclitus (535 BC - 475 BC), once coined the theory and phrase “the only constant in life is change”. This is the same theory and philosophy that is used in business, specifically within the principles of the governing bodies and policies of accounting, today. The mission of the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) is to improve domestic and international accounting standards for the benefit of present and future investors, including lenders, donors, creditors, and users of financial statements. The FASB and the IASB believes that pursuing convergence will make accounting standards and principles as similar as possible while adhering to the mission of the FASB. Convergence among national and international accounting standards would foster comparability with the use of internationally converged accounting standards. Comparable Standards would reduce costs to users and preparers of financial statements and make worldwide capital markets more efficient. The purpose of the FASB and the...
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...International Business Research Vol. 2, No. 2 Harmonization of Accounting Standards through Internationalization Nikhil Chandra Shil, ACMA (Corresponding Author) Department of Business Administration East West University 43, Mohakhali C/A, Dhaka – 1212, Bangladesh Tel: 9887989(Off.) ext 253, 01819289589 (M) E-mail: nikhilacc@yahoo.com Dr. Bhagaban Das P.G. Department of Business Management, Fakir Mohan University P. O.: Balasore, Pin.: 756019, Orissa, India E-mail: bhagaban_fm@yahoo.com Alok Kumar Pramanik Department of Commerce, Bhatter College P. O.: Dantan, Pin. : 721426, Paschim Medinipur, West Bengal, India E-mail: alokdantan@sify.com Abstract The journey to have a common set of accounting standards started long before to give it a professional shape and essence. And accountants all over the world feel the necessity to shorten the gap among different streams of accounting practices through harmonization. Still, we have a couple of strong variants of accounting practices (say, for example, US GAAP, UK GAAP, IAS etc.) over the world existed and practiced simultaneously. These variants are working as threats towards harmonization of accounting practices. However, the profession has also witnessed some improvements in recent years in the process of global convergence putting some ray of hope. International and even local standard setting bodies have come up with projects of harmonization and in most of the cases became successful. The day is not far away when we will observe...
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...Accounting Standards Boards Paper Jacobian Stephens ACC/541 June 29, 2015 Mrs. JoEtta Malone Accounting Standards Boards Paper The Financial Accounting Standards Board (FASB) started the Convergence program back in 2002 and stated that a three-part strategy for seeking greater comparability in accounting standards internationally should be implemented.. FASB sought out to develop a higher quality for Generally Accepted Accounting Principles (GAAP) standards and improve the relations and communication with additional nationwide standards setters. The convergence program is to help increase the quality of recording standards. FASB and IASB recognized that increasing the comparability of principles will not be as easy as they thought. To do so, they will need the help of setters around the world to have an agreement amongst the standards. We also have to remember that FASB priority is to improve financial reporting. Doing so will help investors. Eliminate any other alterations between IFRSs and U. S. GAAP that may remain on January 1, 2005 by undertaking projects that both Boards would address simultaneously. Carry on the progress on the joint projects presently proceeding. Inspire their consistent interpretative bodies to organize their activities. FASB has been the nominated union in the private division for generating standards of financial bookkeeping that administer the training of financial reports by non-governmental entities. To improve and establish principles...
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...Accounting Standards Boards Debra McCaster ACC 541 June 27, 2011 Ken Burton Accounting Standards Boards The IASB (Internal Accounting Standards Board) set standards dealing with international accounting and FASB (Financial Accounting Standards Board) has standards dealing with international accounting but they mainly focus on accounting within the United States. The purpose of the convergence is to eliminate the differences dealing with international accounting and to have a much better focus on the consistence of the standards for international accounting. In 2003 FASB and the IASB decided to come together and create a short-term and long-term convergence project to attain a better uniform set of accounting standards. Among the efforts are (1) The FASB’s Short-term international convergence Project, (2) the Norwalk Agreement, and (3) the Roadmap to Convergence (Schroeder, Clark, & Cathey, 2011). The short-term convergence project will consist of nine short-term projects. These projects will consist of segment reporting (ISAB), fair-value option, including investment properties (IASB), borrowing cost (IASB), government grants (IASB), impairment (joint), income tax (joint), joint ventures (IASB), research and development...
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...Convergence or Adoption: From U.S. GAAP to IASB Deanna E. West American Public University Accounting 600 Professor: Dr. Kuhn Abstract This paper discusses how the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) signed the Norwalk Agreement in 2002, and agreed to work together towards the development of high-quality, compatible accounting standards that could be used globally. The creation of short-term and long-term convergence plans in order to assist the boards in prioritizing so that they could adhere to their agreement of “compatibility as soon as practicable.” The outcome of 37 key joint IASB/FASB projects based on the results of the Convergence table by Paul Pacter and the ongoing debate of convergence of IASB and FASB, or the sole adoption of IASB. Convergence or Adoption: From U.S. GAAP to IASB September 18, 2002, in Norwalk, Connecticut, the IASB and the FASB signed a memorandum of understanding in which the two boards promised to work hard to “(a) make their existing financial reporting standards “fully compatible” as soon as is practicable and (b) to coordinate their future work programs to ensure that once achieved, compatibility is maintained.” This became known as the Norwalk Agreement. Under the Norwalk Agreement the IASB and the FASB each agreed that they would commit to the development of high-quality, compatible accounting standards that could be used for both cross-border and domestic financial reporting...
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...The Convergence of Accounting Standards The need for accounting standards and recordkeeping of financial statements became necessary as economic development became more complex and the rise capital markets became necessary to support economic growth. Financial information is the language businesses use to communicate their capabilities to potential investors, lenders and other users this information. However, for this information to be useful it needed to be reliable, relevant and comparable. These are some of the qualities used in the by the FASB and the IASB to create accounting standards. The FASB and the IASB are the two current bodies in charge of creating accounting standards. The FASB creates standards in the United States and the IASB creates international accounting standards accepted by many international economies. International standards became necessary as many national companies began to engage in international trade. The purpose of these standards was to increase harmonization of international accounting standards to support international economic growth by providing international investors with useful information. Both institutions have evolved throughout the years as financial transactions have become more complicated and new industries developed and evolve. The Financial Accounting Standard Board The FASB evolve from the APB (Accounting Principle Board) that evolved from the CAP (Committee on Accounting Procedures). These organizations developed accounting...
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...Accounting Standards Boards ACC/541 Accounting records was found in various parts of the world that are dated several thousand years ago. The world knew how to record their transactions since they knew trade. The more complicated the trading transactions get the more the need for more developed financial recording. In the United States the interest in improving the financial statements started after the great depression. The New York Stock Exchange (NYSE) and the American Institute of Accountants (AIA) met to discuss how to protect the investors. The cooperation between the NYSE and the AIA introduced legislations and two of the most important of those legislations were the Securities act of 1933 and the Securities Exchange Act of 1934 which established the Securities and Exchange Commission (SEC). In 1936 The AIA and the American Society of Certified public Accountants merged together to establish a bigger organization called the American Institute of Certified Public Accountants (AICPA). The AICPA established Committee on Accounting Procedure and the Accounting Principles Board failed to achieve the goals that they were created for. The AICPA appointed two Committees, the Wheat Committee and the Trueblood Committee. The Wheat Committee’s responsibility was to study how financial accounting principles should be established. The Committee’s recommendations were the abolishment of the APB and the establishment of the Financial Accounting Standards Board (FASB). The mission...
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...International Financial Reporting Standards (IFRS) MBA 691: Managerial Accounting Professor: Prepared by: April 19, 2009 Bibliography: • Ernst & Young, “U.S. GAAP vs. IFRS: The basics”, January 2009. • Securities & Exchange Commission, “Roadmap for the Potential Use of Financial Statements Prepared in Accordance with International Financial Reporting Standards by U.S. Issuers”, www.sec.gov/spotlight/ifrsroadmap.htm (Release No. 33-8982; November 14, 2008). • The Association of Chartered Certified Accountants (ACCA), “Impact of IFRS in Europe”, www.accaglobal.com/publicinterest/activities/research/reports/global_integration/, October 7, 2008. • Internal Auditor, magazine, “Getting Up To Speed with IFRS’, October 2008. • International Accounting Standards Board, “IASB Responds to G20 Recommendation and US GAAP Guidance’, www.iasb.org/News/Press+Releases/IASB+Responds+to+G20+Recommendations+and+US+GAAP+Guidance.htm, April 7, 2009. • EU Finance Ministers Statement, www.eu2009.cz/en/news-and-documents/news/statement-by-the-informal-ecofin-15621/ , April 4, 2009. • National Association of Corporate Directors (NACD) – Directors Monthly article, “IFRS – What The Board Needs to Know”, http://www.deloitte.com/dtt/cda/doc/content/us_assur_IFRS_DM%20Sep08_20080911pdf.pdf, September 2008. • Deloitte, www.deloitte.com/us/debates/IFRS. • Deloitte, “IFRS Conversion: Front or back...
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...Accounting Standards Boards Cherish Malbrue Accounting 541 July 2, 2012 Bethany Kessel Accounting Standards Boards The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) began their joint commitment in 2002 to improve both generally accepted accounting principles (GAAP) and International Financial Accounting Standards (IFAS). The mission of these two boards is to try to make both methods of accounting standards as compatible as possible. The two boards are trying to come to a common denominator that will allow use for both domestic and cross-border financial reporting. The FASB and IASB are also working on a number of individual standard issues to help make FASB and IASB standards more compatible (Schroeder, Clark, & Cathy, pp. 79, 2011). The two boards were sure to have these projects completed by the end of 2011. Brief History of the Two Boards The concept of international convergence first arose in the late 1950s in response to post World War II economic integration and related increases in cross-border capital flows (“International Convergence Of Accounting Standards-Brief History”, n.d.). Convergence replaced harmonization in the 1990s, which is a high set of standards to be use in almost all the major capital markets. More than one hundred countries require or permit the use of IFAS. Since 1973, FASB has been the designated organization in the private sector...
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...“Weak Signal: Evidence of IFRS and US GAAP Convergence from Nokia’s 20-F Reconciliations” Nokia was created in 1967 through a merger and has become one of the world’s leaders in mobile communications and electronics. The Finland based company gained a lot of power through acquisitions within the telecommunication and electronic market, made around the 1980’s. The company is now specializing in four segments, mobile phones, multimedia, enterprise solutions, and networks. Nokia has ADRs (American Depository Receipts), which allow investors in the US to trade securities without having to trade in foreign capital, that are currently traded in the New York Stock Exchange as “NOK”. Company shares are also being traded on the Frankfurt, Helsinki, and Stockholm stock markets. Nokia’s first issuance of an ADR was in 1994. Since the communications market is changing and growing very rapidly, the best way to differentiate is to acquire smaller companies and share resources and knowledge. A lot of money is spent on research and development of more advanced technologies to gain a competitive advantage. Currently, Nokia has teamed with Microsoft to offer an alternative to the android and Apple’s iOS. Nokia also has a strong presence in markets such as the wireless handset and wireless infrastructure markets. According to Standard& Poors Communication Equipment 2006 Industry Survey, only Ericsson was ahead of Nokia in being the top supplier of wireless infrastructure. In the same report,...
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...Chakroborty, | | |198 A, Sarat Bose Road, | | |Kolkata – 700029. | | | | ROLE OF COST AND MANAGEMENT ACCOUNTANTS IN IFRS REGIME CMA. Arindam Banerjee Abstract IFRS has today become a universal financial reporting language through which all the global companies are communicating with its global investors rather than having a divergent set of standards applied differently in different countries. Against this background the present article begins with the concept and background of IFRS. The article further...
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