The Standards Of The Iasb Framework

The purpose of creating FASB is to establish standards of financial accounting that control the establishment of financial reports by nongovernmental organizations. This instance is identified as the number one authority by the SEC and the American Institute of Certified Public.FASB Accounting Standards Codification serves as a reference guide of authoritative standards for accounting and reporting, to be applied by nongovernmental organizations. Some examples are; ASC 830-230-55-1 that can identify as Statement of Cash Flows for Manufacturing Organization with Foreign Operations, ASC 926-330-35-1 can be justified as Products Held for Sale, ASC 954-440-25-2 identified as Continuing Care Retirement Community, ASC 505-20-50–1 means Equity, Stock Dividends and Stock Split and Disclosure, ASC 710-10-05-6 describe as Employees Compensations..

In May 2008, the AICPA’s Governing Council designated the International Accounting Standards Board (IASB) as the body authorized to establish international financial accounting and reporting principles under rule 202 and 203 of the AICPA Code of Professional Conduct. Below is an illustrative Independent Auditor’s Report on financial statements issued in conformity with IFRS.

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

IASB. 2010, "The Conceptual Framework for Financial Reporting" IFRS, pp. A21- A38, viewed 23 April 2014,

The FASB has the mission of create and improve the accounting standards and the financial reports by the nongovernmental organizations, offering useful information that allows investors and other users to make decisions. The implementation and improvement of the standards is made taking into consideration the opinion of all the parties interested and it is supervised by the Financial Accounting Foundation’s Board of Trustees. This process open to the public participation warranty the transparency into the standards-setting process. Therefore, the FASB issue a variety of reports requesting feedbacks on its standards setting activities. (FASB, Standard-setting process, n.d.)

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).

The International Accounting Standards Board (IASB) was created after the Financial Accounting Standards Board (FASB) to establish a single set of accounting procedures and standards for both boards. The process has not always been an easy one, but the goal of merging the accounting standards globally overrides the disagreements. Overcoming impediments, such as language, culture, economic and political environments has made the process problematical. The IASB and FASB continue to labor on the short term goals agreed upon at the Norwalk Summit, held in Norwalk, Connecticut,

The intangible asset needs to be identifiable which means that the organization should be able to dispose of the asset without disposing off the whole of the business at the same time.

Unless otherwise stated, financial statements herein are presented with conformity of United States( Generally Accepted Accounting Principle (GAAP). Within the latter confines, estimates such as amortization and useful life of an Intangible Asset (IA), although a valid issue, will be generally out of the scope of this paper. The reason for the limitation is that for cash flow purposes, as well as for balance sheet analysis, such estimates represent regulatory requirements and provide little by way of capturing the essence of the issues surrounding IA. Therefore, the ultimate purpose of this paper is to venture out of the confined safety of U.S. GAAP and investigate what other isms are possible for presentation of a Statement of Financial Position which incorporates intangible assets.

AASB 138 defines intangible assets as “identifiable non-monetary assets without physical substance”. Such assets include but are not limited to goodwill, trademarks, patents and research and development. AASB 138 Intangible Assets has been implemented to prescribe the accounting treatment for intangible assets that have not been specifically dealt with in any other standard. Therefore, this standard only applies to intangible assets that have not been previously dealt with. Furthermore, it can be established that this standard is an example of normative accounting theories because the standard prescribes what should be done, rather than predicts what people may do. According to AASB 138 Intangible Assets, in order for an asset to be recognised in the financial statements it must meet specific criteria. The required criterion states that the asset must be identifiable, the entity has control of the asset, future economic benefits are probable and the cost of the asset can be measured reliably.

The International Accounting Standards Board (IASB) issued and developed the new International Financial Reporting Standards (IFRS) as new international accounting standards after 2001. In 2006, the Chinese government issued a new set of Accounting Standards for Business Enterprises (ASBE) which are substantially consistent with IFRS.

The accounting world is shaped by stringent and clear rules, principles, standards and guidelines. These are all meant to define accounting operations and reporting discipline. With the emergence of International Accounting Standards (IAS), which was later replaced by International Financial Reporting Standards (IFRS), the accounting concepts, analysis, disclosures, reporting and presentation became easier and practical. Currently, accountants, managers and related parties find it concrete and consistent in protecting professional boundaries.

First, The International Accounting Standards Board (IASB) issues The International Financial Reporting Standards (IFRS) on U.S securities and exchange companies listed.

An intangible asset is an identifiable non-monetary asset without physical substance. (AASB 138, para 8). In order for an asset to be recognised as an intangible asset three main characteristics have to be met namely they are: (i) identifiable, (ii) non-monetary, (iii) without physical substance. An intangible asset can either be separately acquired or internally generated. This report will focus on the accounting treatment of internally generated intangible assets prior to and after the adoption of IFRS.