The Financial Accounting Standards Board (FASB)

In 1973 the Financial Accounting Standards Board (FASB) was established to set the financial accounting standards in the United States of America for nongovernmental entities. These standards are collectively called U.S. Generally accepted Accounting Principles, or U.S. GAAP. The Securities and Exchange Commission (SEC) and the American Institute of Certified Public Accountants acknowledge the authority of these standards (FASB, n.d). A “proven, independent due process” is used to collect the viewpoints of the financial statements prepares and users for the constant improvement of these standards. An Accounting Status Update(ASU) is not an authoritative source however documents the amendments to communicate the changes in the FASB Codification for a user to understand the reason and future of those changes (FASB, n.d).

This thesis will discuss the proposed changes of pensions and the new updated leases issued by FASB, which are important issues for entities such as corporations. FASB is the Financial Accounting Standards Board. It is a seven-member independent board consisting of accounting professionals who establish and communicate standards of financial accounting and reporting in the United States. FASB was created to provide users accurate information in one location. Recently, FASB developed the FASB Codification Research System: a web-based system allowing registered users to electronically research accounting issues.

Fast forward to 1970, where the APB’s main contribution “Basic Concepts and Accounting Principles Underlying Financial Statement of Business Enterprises was highly critized for achieving too little too late. Ultimately, resulting in the AICPA suggesting that the standard setting role be turned over to an autonomous body known as the Financial Accounting Standards Board

Even before the financial crisis began in 2008, the Financial Accounts Standards Board (FASB) and the International Accounts Standards Board (IASB) began working on a joint project to overhaul their accounting standards for financial instruments. The financial crisis showed how the overstatement of assets was caused by a delayed recognition of credit losses associated with loans and other financial instruments. This led to the IASB and FASB forming the Financial Crisis Advisory Group (FCAG) in October 2008 with the objective to deal with reporting issues that arose from the crisis and to examine how improvements in financial reporting could help improve investor confidence. In particular, both the regulators felt the need for a forward looking

The Morley (2012) website states that generally accepted accounting principles are standards that determine how accountants in the U.S. “Conduct and format their reports are determined by the FASB, U.S. Accounting records must be seen by a number of people outside of the organization for transparency purposes” (Morley, 2012). The Morley (2012) website states that if each company created its own accounting reporting methods, comparing financial statements would be inefficient and hiding information would be easier. According to the FASB, entities such as the U.S. Securities Exchange Commission and the American Institute of Certified Public Accountants recognize FASB's authority to set standards. This law ensures that no money is pocketed without being taxed and that all revenues are reported. As far as general financial ethical standards, “financial professionals have obligations to be competent, accountants and financial professionals must not only have secured education and practice that prepares them for their positions, but they must also continue that education by learning new information that can affect their practices” (Morley, 2012). According to “Associations For Financial Professionals” (2012), “financial professionals have an obligation to their

Financial reports are used by banks, investors, or governmental agencies to determine the financial stability of an organization. Importantly, financial reports are used to set stock prices and determine the solvency of an organization. Therefore, FASB was created to ensure organizations report accurate financial information. Additionally, financial reports are created using the same format as outlined by GAAP by all organizations.

Financial statements must be prepared in accordance with Generally Accepted Accounting Principles to the interested users or stakeholders. GAAP are developed by Financial Accounting Standards Board (FASB), Federal Accounting Standards Advisory Board (FASAB), Governmental Accounting Standards Board (GASB), and American Institute of Certified Public Accountants (AICPA). These standard setting bodies make it possible for statements to be compared and stated accurately. It is important to have honest management and accounting firm to enforce these set of rules established by the governing bodies in order to

The IASB and the FASB have both established frameworks for the reporting of financial information, however, despite their apparent similarities several key differences exist between their structures. For example, U.S. GAAP has been traditionally defined as being a more rules-based standard, which has established strict guidelines and contingencies for reporting financial information. Given its history and the recent tumultuous financial environment, particularly the 2008 financial crisis, U.S. GAAP has become a very robust and strictly enforced set of standards. This has given rise to concerns that some preparers of financial statements may commit accounting fraud by circumventing or manipulating the rules of U.S. GAAP. Supporters of IFRS argue that “the more detailed the guidance, the greater the opportunity to find the loopholes in the guidance” (Hillman, Heaston, and Dodd 5). Despite these concerns, however, U.S. GAAP continues to be the preferred standard of most accounting professionals. Conversely, IFRS is a principles-based standard. The principles-based approach of IFRS grants management the discretion to use different accounting methods when preparing financial data. While this practice is praised for its focus on fair values and the freedoms it provides managers, it is often criticized for being far too subjective and inviting “a human element that could increase the risk of financial

The Financial Accounting Standards Board (FASB) established the United States’ Generally Accepted Accounting Principles (GAAP) which have been used in US corporations for over 75 years. The purpose of having these principles allows financial statements from businesses to be compared truthfully and professionally. It also serves as a standard for accountants to follow. There is talk of the United States no longer following the principles of GAAP and adopting the International Financial Reporting Standards (IFRS). By adapting to the international standards there will be a better opportunity for continuity between businesses in foreign countries and the United States. GAAP only pertains to the United States’ financial

The generally accepted accounting principal (GAAP) and international financial reporting standard (IFRS) are standards governing how economic events are reported. In the United States, the Securities and Exchange Commission (SEC) relies on the FASB, the accounting standard-setting body of the US, to develop accounting standards that public companies must follow when publishing financial statements. On the other hand, many countries outside of the Unite States have adopted the International Financial Reporting Standard (IFRS) which

GAAP or Generally Accepted Accounting Principles are set by the Financial Accounting Standards Board (FASB), an organization of accountants, financial analysts, and regulators who draw up accounting practices to meet ongoing changes in the markets. Every time some new issue arises, the FASB studies the problem, develops a proposed accounting procedure, and sends it for review and comment to different users of financial statements, including corporations and analysts (Logue, n.d.).

The Financial Accounting Standards Board is board of seven independent members who are accounting professionals that was developed in 1973. This seven member group is responsible for communicating the standards that are in place for financial accounting and reporting that takes place in the United States. Generally accepted accounting principles (GAAP) are the standards that are used by the FASB to govern the way in which corporations prepare their financial reports. This process of utilizing these standards to maintain and report accounting files is the only method that the US Securities and Exchange Commission will accept. The members include; Michael Crooch, CPA, George Batavick, CPA, Edward Trott, CPA, Leslie Seidman, CPA, Donald

AASB 8 is an important Accounting Standard from the financial information reporting perspective. It ensures that the entity has to disclose enough information to the user of financial information about the economic activities the entity is involved into and the scope or spread of these activities. The standard requires the entity to provide information about the reportable operating segments of the entity. Operating segments are the components of the entity of which separate financial information is available and it is regularly evaluated by the management – more specifically – the CODM – i.e. the Chief Operating Decision Maker to assess the performance of the particular component and to allocate resources in appropriate

In September of 2006, The Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 157: Fair Value Measurements ("FAS 157") to provide guidance about how entities should determine fair value estimations for financial reporting purposes. These guidelines coincide with the conceptual framework and provide a baseline for accounting professionals to gauge the true worth of an asset. The goal of the conceptual framework to provide clear concise information across the accounting profession. It allows regulators to provide a uniform standard to individuals and companies, as well as providing a platform to roll out future account developments in the field. However, despite the best efforts of regulators, there is always bumps on the road to providing a smooth and compliant framework for accountants.

In mainly everything, sports, class rooms, or work places you have a set of rules to go by. In the accounting world, you must also follow a set of rules and standards. The Generally Accepted Accounting Principles (GAAP) or the International Financial Reporting Standards (IFRS). Most countries around the world use IFRS while the United States uses GAAP. International Financial Reporting Standards and Generally Accepted Accounting Principles do things differently. Each country’s government sets which principles the accountants will use. There are also organizations that have been formed to help with all the confusion between countries. The organizations are called Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB). FASB is the organization that has been designed by the US government to establish GAAP in the United States. IASB is the international organization developing and promoting accounting standards to be used throughout the world.