The International Accounting Standards Board

Furthermore, according to ASC 810-10-10-1, it explains the objectives of the consolidated financial statements, as

The IOSCO plan does not cover accounting standards.(66) These standards are important for providing financial statements in a scheme that are prepared in the similar manner as those by issuers from other countries. The development of international accounting standards is the subject of a distinct project by IOSCO, and many accounting professionals who are concomitant with that undertaking are hopeful that a satisfactory solution is within reach.(67) Supposing, however, that an agreement is possible on a core set of financial standards and that they too are embraced by securities regulators as compulsory for foreign issuers, the road to commonality has at least two other impediments.

“The objective of general purpose financial reporting is to provide financial information about the reporting entity that is useful to existing and potential investors, lenders and other creditors in making decisions about providing resources to the entity.”

According to Alexander et al. (2011), stakeholders around the world uses information from financial statements in their decision-making process for many different purposes and it is almost the same on how they use the information in every country. However, there can be differences on the communication that information when different types accounting standards are used. Ball defines that “IFRS are accounting rules (‘standards’) issued by the International Accounting Standards Board (IASB), an independent organisation based in London, UK” (2006, p6). Therefore, they are set of rules where public companies globally should apply to when producing financial reporting. This essay will be looking further into how local institutional and economic factors influence arise with uniform standards while preparing financial reporting in different countries. Based on the findings, this essay will conclude that it is possible to produce uniform financial reporting with uniform standards with some changes to the current IFRS.

The IFRS are the standards, interpretations and the framework adopted and developed by the International Accounting Standards Board (IASB) (Freeman, 2014). These set of ac-counting standards would improve comparability of financial information as well as the flow and pricing of capital (Epstein at al 2009). IFRS is becoming the global standard for the prep-aration of company financial statements (Freeman, 2014). International compatible financial statements assist in lending decisions, loan monitoring, and establish international vendor credit and development of other international business relationship (Evans, et al.., 2005).

The international financial accounting standards is a non for profit private sector. Their aim is to serve the public interests. With the growing globalisation of business and finance, it has stimulated a standardisation of accounting standards among countries. This measure aims to

The paper then evaluates International Accounting Standards Board’s (IASB) attempts to develop a conceptual framework and the current state. In the final section I will discuss and reflect upon the evidence presented to support the topic of this essay along with a conclusion of facts and ideas presented.

With the number of countries that have switched to the International Financial Reporting Standards (IFRS) for their financial reporting, as well as the continued efforts made between the IFRS and US Generally Accepted Accounting Principles (US GAAP), it is evident that international convergence is an overall appealing idea for global reporting. With that said, US GAAP has worked with IFRS to create a universal standard; and while progress has been made to diminish variances between the standards, there are still large, if not unattainable, efforts ahead of us. The hype over a proposed uniform set of global accounting standards appears to be stunted by the lost efforts in the convergence project between the US GAAP and IFRS. As the Financial Accounting Standards Board (FASB) moves forward with its standards setting, there must be a reevaluation of the goal for reporting standards and efforts with the International Accounting Standards Board (IASB).

In 2001, International Accounting Standard Board (IASB) replaced International Accounting Standard Committee (IASC) in order to develop a high quality standard of accounting for use in the capital markets area and by other numbers of users. (Mary E. et.al, 2007). There were so many issues presented and discussed since then to achieve their main goal. However, without any guidance and framework, to create a new standard that is acceptable and relevant for all users of accounting are difficult. So, conceptual framework is basically was set up to assist the IASB by

With the development of the globalization, the business connection between diverse countries is becoming stronger and closer. Thus finding a uniform business language among different enterprises is an increasingly important issue, which could help company owner to understand better and evaluate various investment opportunities in foreigner countries. Accounting is widely recognized as one of the most efficient and useful tools to communicate in the business word. However, there are a large number of accounting standards in diverse financial markets, such as Japan Generally Accepted Accounting Principle (JGAAP), Australian Accounting Standard (ASS) and the US Generally Accepted Accounting Principle (US GAAP). To fill the gap between discrepant accounting standard, the International Accounting Standard Board (IASB) attempt to set up universal accounting standard and make it universally accepted and applied. IASB has established in 2001 April, which was reorganized by the International Accounting Standard Committee (IASC), and its work is quickly approved by its target group. During this process, a common conceptual framework was initially developed by a joint IASB-FASB Project, which was used as a basis for accounting standards. In 2012, this project was suspended and replaced by an IASB-only comprehensive project (reference).

The existing Conceptual Framework of IASB’s was developed by its predecessor body IASC (International Accounting Standards Committee) in 1989. The material on the objective of financial reporting was first revised by the IASB in 2010 with the US national standard-setter, the Financial Accounting Standards Board (FASB). This ED sets out the proposal for a revised Conceptual framework. It has been developed on the behalf of responses received on (‘the Discussion Paper) which was published in July 2013. (IFRS, May 2015)

Similar to the Financial Accounting Standards Board’s (FASB) governance of U.S. GAAP in the United States, the International Accounting Standards Board (IASB) was formed in 2001 to be the governing body responsible for International Financial Reporting Standards (IFRS). IFRS standards are beginning to be recognized globally as the leading accounting standards. Since 2002, the IASB and FASB have been committed to agreeing on unified international accounting standards. The ultimate goal is for IFRS to replace U.S. GAAP for the United States and be the new requirement for reporting for public companies. In the meantime, there are around 120 countries that already permit or require IFRS reporting and 90 countries that have fully adopted

In September 2005, the IFRS and GAAP committed to standardizing the Fair Value Measurement in both the IFRS and GAAP. A committee was created that to evaluate all techniques being used across the board of both standards. In May of 2011 the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) issued new guidance on fair value measurement and the disclosure requirements for both the IFRS and the GAAP. (FASB, May) The new guidelines defined the same in both the IFRS and GAAP closes a gap that has been a problem with more companies operating globally in today’s market. Having the new guidance process helps companies know when to use fair value measurement and

When preparing financial statements there are issues that need to be taken into account. The Framework was designed to provide resolutions to these issues.

As the globalization of markets has become more prominent in recent years, many are wondering why a single set of accounting standards are not followed. After all, English may be the business language, but accounting is the language of business. Accounting standards are essentially just rules that must be followed when reporting any accounting data on any of the company’s financial statements. The objective is to provide the user (creditor or investor) with relevant information of the company’s financial position so that users then can compare it with another company’s financial statements and proceed to make an informed decision. With only that objective in mind, it can be seen why a common set of accounting standards would be beneficial.