The Future Of Measuring Expected Credit Loss

The Financial Accounting Standards Board (FASB) sets the Generally Accepted Accounting Principles in the United States. The FASB Accounting Standards codification implements a system for organizing non-governmental generally accepted

As stated earlier, the IASB arose from specific needs of the accounting industry and the public. As international trade has increased, the need for transnational accounting information has increased as well. This sparked the demand for development of international accounting standards to make financial data between countries more comparable. In 1973, the International Accounting Standards Committee (IASC) was formed to develop these international standards. The standards issued by the IASC, prior to 2001, were called International Accounting Standards (IASs). In 2001, the IASC made the International Accounting Standards Board (IASB) the official international standard-setting body. The standards issued by the IASB are called International Financial Reporting Standards (IFRSs) (Schroeder, Clark, & Cathey, 2011, p. 82-87).

A joint convergence committee created the members of (FASB) and (IASB). (IASB) is recognized as an independent accounting standard-setting body that is similar to (FASB) that joins (GAAP), and is governed by the (IFRS) foundation. Due to this convergence, (AICPA) believes U.S. adoption of a single set of high-quality, globally accepted accounting standards will benefit U.S. financial markets and public companies by enabling preparation of transparent and comparable financial reports throughout the world, (American Institute of CPAs, 2016). Secondly, (AICPA) is dedicated to supplying the whole accounting profession with information, tools and IFRS.com for instance to assimilate as well as implement a new set of standards. As the (AICPA) supports continual convergence of reliable accounting standards between (IFRS) and (GAAP) the mission of completion between (IASB) and (FASB) is prolonged. (AICPA) will always support funding mechanisms of the body-making

Accounting has been playing a very important role in many places such as Australian accounting standards. Australian accounting standards is also developed by the Australian Accounting Standards Board (AASB). This essay will firstly discuss what AASB is, the role and the functions of AASB. And then, following this, the other projects’ role such as Financial Reporting Council (FRC) and International Accounting Standards Board (IASB) and the relationship between AASB, FRC and IASB.

On November 18, 2002 the FASB and IASB came together at a meeting in Norwalk, Connecticut to start the wheels in motion for the purpose of establishing a new set of financial standards. The FASB and IASB are committed to create financial standards that will be accepted both domestically and internationally that are of high quality and compatible for financial reporting. At present more than a 100 countries already use the International Financial Reporting Standards. The U.S. at present has not accepted a changed in accounting procedures; therefore, this is going to be a major task for both the FASB and IASB to complete successfully this union. I do believe that the partnership between the FASB and IASB will achieve the goals of creating a common financial reporting set of standards that will be accepted by all.

Although, many authors write about these huge incidents in America, few are discussed about the scandals abroad. Other countries (Switzerland, Italy, Greece and others) also have their issues with frauds and scandals, just not as wide spread. Therefore, the International Accounting Standards Board (IASB) seek to implement a single global accounting standard, called the International Financial Reporting Standards (IFRS) (Street, 2012). The IASB was actually established during the 1970s to promote a worldwide acceptance of regulations, accounting standards and procedures (Schroeder et al, 2011). In 2002, the FASB and IASB agreed that there is a need for an international reporting standard. Due to the high volume of international trade and foreign operations, the two boards, decided that there should be one global approach to accounting standards (Zeff,

A variety of parties are interested in and affected by the development of accounting standards. Various users of accounting information have discovered that the best way to impact the formulation of accounting standards is to attempt to influence the standard setters. The CAP, APB, and FASB have all come

The globalization of markets over the past 50 years has led to the demand for increasingly comparable financial statements across countries. In response to this demand, the International Accounting Standards Board (IASB) was formed with the purpose of developing a set of high quality global accounting standards. Although a majority of developed markets have adopted the international standards, the United States has not. One reason for the delay in adoption is that many of the standards are very similar. However, there are also several key differences between the two. Presently, the United States Financial Accounting Standards Board (FASB) and the IASB have

The Financial Accounting Standards Board (FASB) was established in 1973 in order to create and develop standards of financial accounting and reporting for the general use of the public and, in particular, users of financial information including auditors, creditors and investors. This financial information is standardized for greater clarity for the guidance and education of users (FASB org, 2009a). The primary purpose of FASB as a private and non-profit organization is to develop Generally Accepted Accounting Principles (GAAP) in the United States. The FASB sets-up accounting standards for public companies in the U.S. under the mandate of the Securities and Exchange Commission (SEC). The FASB oversees the financial security; stability and

The International Accounting Standards Board (IASB) and the Financial Standards Accounting Board (FASB) in the United States are working towards convergence between US GAAP and the IFRS, which are the two major accounting standards in the world. Most of the other nations in the world with their own accounting standards are also working towards convergence. The process has been ongoing for several years, and the organizations involved issue updates periodically in order to ensure that both the accounting profession and the general public are aware of the state of the convergence process.

The International Accounting Standards Board (IASB) began operations in 2001. It is an organization committed to developing, in the public interest, a single set of high quality, global accounting standards that require transparent and comparable information in general purpose financial statements. The IASB has developed procedures that bring transparency, predictability, and consistency (IASCF Press Release, December 2, 2007).

The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) are working together to eliminate a variety of difference between the United States generally accepted accounting procedures (U.S. GAAP or GAAP) and International Financial Reporting Standards (IFRS). This convergence project grew out of an agreement reached by the two boards in 2002 (Deloitte, 2004).

Credit risk: It is primarily the loss which the company faces when the debtor of the counterparty fails to perform under the contractual obligations (Allan et al., 2015). This exposure results from the financial assets including trade & non trade debt receivables, finance lease receivables. The maximum exposure amount is usually the carrying amount of the assets. The risk is considered to be significant in the next year as the company has a huge assets base in the various countries in which it operates as highlighted in figure 2 in Appendix 1. The risk of default cannot be minimized despite the fact that there are certain mitigating actions taken by the business.

FASB & IASB are currently working jointly to establish a single set of universal accounting

For decades, countries have designed their individual accounting standards principle-based, rules-based, tax-oriented, or business-oriented. Globalization has led to the greater needs with regards to harmonizing the standards (Kimmel, 2013). By late 1990’s the dominant standards were the IFRS (International Financial Reporting Standards) and U.S. GAAP (Generally Accepted Accounting Principles). Thus, both the standard setters namely; FASB (Financial Accounting Standards Board) and IASB (International Accounting Standards Board) launched a convergence project prior to the IFRS being essentially adopted by several countries. Measures are being taken to reduce likely impacts the frameworks would have on financial statement and reduction of last minute changes (Kimmel, 2013).