Fasb vs Iasb

FASB VERSUS IASB

In order to describe the most significant differences between the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) we should understand their history.

FASB

The FASB was created by the Wheat Committee in 1973 as a replacement of the Accounting Principles Board (APB) (Schroeder, Clark & Cathey, 2011). It is the official body that issues accounting standards (GAAP) in the United States that governs how financial reports are prepared. These principles are in the interest of the public, mainly investors and creditors. The FASB mission is:

“The mission of the FASB is to establish and improve standards of financial accounting and reporting by nongovernmental entities that provides decision-useful information to investors and other users of financial reports. That mission is accomplished through a comprehensive and independent process that encourages broad participation, objectively considers all stakeholder views and is subject to oversight by the Financial Accounting Foundation’s Board of Trustees.” (fasb.org).

IASB

The IASB is an independent, privately funded organization based in London, England consisting of an internationally based board appointed by trustees. It was formed in 2001 as successor to the International Accounting Standards Committee (IASC) (Schroeder, et al, 2011). The international standards issued by the IASB are called International Financial reporting Standards (IFRSs) and are for use by a wide range of users. The objectives of the IASB are:

“(a) To develop, in the public interest, a single set of high quality, understandable and enforceable global accounting standards that require high quality, transparent and comparable information in financial statements and other financial reporting to help participants in the world's capital markets and other users make economic decisions;

(b) To promote the use and rigorous application of those standards;

(c) In fulfilling the...