International Accounting Standards Board And Financial Accounting

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It all began on October 2002 where the International Accounting Standards Board and Financial Accounting Board signed a memorandum of understanding that has come to be known as the “Norwalk Agreement”. Here the two boards met and decided to make their standards fully compatible and put it into practice and once they conquer their goal, they have to make sure it is maintained. But before I divulge into details regarding the future and presently achieved goals of the convergence, I would like to throw some light on the history and background of the two boards involved. International Accounting Standards were formed between 1973 and 2001 by the board of the International Accounting Standards Committee (IASC). On 1 April 2001, the new…show more content…
After the year 2001 almost 120 countries have adopted the use of IFRS. On the other hand The United States Generally Accepted Accounting Principles have been set by the American Institute of Certified Public Accountants (AICPA) which is subject to Securities and Exchange Commission regulations. The AICPA first created the Committee on Accounting Procedure in 1939, and replaced that with the Accounting Principles Board in 1959. In 1973, the Accounting Principles Board was replaced by the Financial Accounting Standards Board (FASB) under the supervision of the Financial Accounting Foundation with the Financial Accounting Standards advisory council serving to advise and provide input on the accounting standards. Organizations such as United States Security and Exchange Commission, Financial Accounting Standard Board, and Governmental Accounting Standards Board influence the GAAP in the United States.
Coming back to convergence, for the past several years the IASB and IASC before 2001, have been working to develop high quality, easy to understand, and practicable International Financial Reporting Standards to serve investors & creditors, around the world in globalized capital markets to make investment decisions. When IASB took over from the IASC in 2001, few countries back then had accepted and practiced International Accounting Standards. Everything changed with the
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