The Principle Based International Financial Reporting Standards Essay

This research project will inform the reader of the difference between the United States accounting standards and International accounting standards. The United States uses the Financial Accounting Standards Board (FASB) to issue financial reporting procedures. The International Financial Reporting Standards (IFRS) are issued by the International Accounting Standards Board (IASB). There are proposals for the United States to adopt the International standards. Financial reporting procedures are debated about the United States using the Generally Accepted Accounting Procedures (GAAP) or following the global procedures. This

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.

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

Over the last decade, the way in which financial reporting is carried out has seen some significant advancements. One of the most momentous changes has been the introduction of International Financial Reporting Standards (IFRS), which have been adopted broadly throughout the world, with one major exception, the United States. Before accounting standards can be considered truly global, this exception has to be resolved. The prospect of such an occurrence took massive strides in 2002, when the Financial Accounting Standards Board (FASB); responsible for standard-setting in the US, announced their intention to work alongside the IASB in order to converge IFRS with US GAAP. For the first time, a truly global set of accounting standards seemed a

The Financial Accounting Standard Board (FASB) and the International Accounting Standard Board (IASB) have been working jointly toward the convergence of the U.S. generally accepted accounting principles (GAAP) and the international financial reporting standards (IFRS). However, several arguments still exist as to whether or not U.S. companies should adopt or converge with IFRS. This qualitative study identified the differences noted between rules-based and principles-based accounting, and discussed the impact of these accounting standards on financial reporting. Additionally, several resources were analyzed to understand the path to convergence and the future state of IFRS. The examination of information regarding the transition towards one single set of accounting standards led to the

On January 1, 2010, Canada made one of their biggest changes in accounting; it was the day that public companies were officially required to transition to International Financial Reporting Standards (IFRS). While it was not an easy task to achieve, Canada accomplished what the U.S is still analyzing. The decision was made in 2006, giving companies enough time to prepare for the changes. Seven years later we analyze just how it has impacted companies all over their country, and whether it was the right decision to make.

There have been plenty of debates surrounding the two type standards; on one side we have the United States General Accepted Accounting Principle (GAAP) which has always been used until now with International Financial Reporting Standards (IFRS). A committee of accountants from the American Institute of Accountants (AIA) created the first set of US GAAP standards in the 1930s. US GAAP is a set of guidelines made to help publicly traded companies create their financial statements. The International Financial Reporting Standards (IFRS) serves a similar purpose, but has been globally accepted. European companies first adopted IFRS in 2005, and by 2012 countries such as Japan, Canada, and India had done the same. Since early 2010, FASB and IASB have been working together to converge both of these accounting standards. The SEC has been on board, and although they have not been successful yet, a Work Plan has been developed which lays out factors, which need to be considered before transitioning into a new reporting system. The main topic for this paper is pension and how both differ from GAAP and IFRS. In the research, it will mainly geared towards pension plan and the benefits that differ between the U.S GAAP and IFRS. Through the research the main information comes from the income statement of the company to identify the difference.

The framework serves as a guide for the standard-setting bodies to develop International Accounting Standards and how to effectively enforce the use of each standard (IAS, 2010). These IASs were first issued by the International Accounting Standards council (IASC) and later on approved and amended by the International Accounting Standards Board (IASB). These standards are crucial for sustaining high level of financial reporting and also assure that the financial statements are comparable to prior years for the same entity and various other entities around the world. The financial statements must be presented in accordance with the standards and among these standards is the essential IAS 1, that lays down the basis for presenting the financial statements.

Over the previous 2 years, the IASB conducted a review of IFRS 3, which is the definition of a business. The conclusion was that this definition needed to be revised, and this is one of the current projects open for comment with the IASB. The following pages will examine what the proposed revision will entail and how this may affect US companies. Also mentioned will be the effects of this amendment based on how IFRS and US GAAP are applied. Further, the focus can also be shifted to evaluate how this amendment would affect a US company doing business abroad.

The International Financial Reporting Standards (IFRS) has been adopted by a majority of first world countries and emerging markets. However, the U.S. still uses the U.S. Generally Accepted Accounting Principles (U.S. GAAP). The 2008 financial crisis and the cost of implication halted the adoption, but there are other obstacles and implications to take into consideration. One important aspect to consider is the tax implications upon adoption, and this typically translates into how the taxes paid will be affected. The implications to tax arise due to the differences in aspects such as revenue recognition, transfer pricing agreements, compensation, strategies in repatriation, debt agreements, and so on. Specifically focusing on the effective tax rate, the income tax, differences in accounting for assets and liabilities, and income and expenses. Included in this paper will be a short explanation on preparing the accounting profession and accounting systems for IFRS adoption, and other tax implications effects to the accounting world.

The IASB laid out in its discussion paper proposed changes and updates to: definitions of assets and liabilities, recognition and de-recognition of assets and liabilities, measurement, equity, profit or loss and other comprehensive income (OCI), and presentation and disclosure. The IASB believes that the International Financial Reporting Standards (IFRS) does not define some matters adequately enough. In the discussion paper, some areas are being completely rewritten while others just need some clarification and guidance.

The International Financial Reporting Standards, or IFRS, are a set of standards designed to keep accounts comparable internationally. They are increasingly important as we move towards a global economy and with the increasing number of international companies. The United States, however, typically uses a different set of accounting standards. These are called the Generally Accepted Accounting Principles, or GAAP. The SEC has displayed interest in switching to the international standards recently, however. “In November 2008, the SEC proposed a road map that, if several milestones are achieved, could lead to a mandated use of IFRS for domestic listed companies in 2014. These actions of the SEC highlight the dedication of the U.S. to

The International Financial Reporting Standards (IFRS) identified the five ele-ments of financial statements as the following: (1) assets, (2) liabilities, (3) capi-tal, (4) income, and (5) expenses.

Since 1973, the International Accounting Standard Committee, now known as the IASB, has been focused on developing a single set of high-quality international accounting standards as an effort to make financial information and financial disclosure more understandable to users around the globe. As the business world became more global, regulators, investors, large companies and auditing firms began to realize the importance of having common standards in all areas of the financial reporting chain (AICPA, IFRS, 2011). As of August 2014, the list of countries that have adopted international accounting standards, or local variants of them, has increased to 173 countries, with six more (U.S., Japan, India, Malaysia, Colombia, and Russia) currently considering adopting IFRS (www.iasplus.com, 2014).

The Conceptual Framework Chapter on Qualitative Characteristics does not Include Prudence. Prudence has been Omitted because it is incompatible with Neutrality