Accounting Standards Board

Accounting Standards Boards

Accounting Standards Boards

ACC/541

February 4, 2013

Valerie Turnbow

Accounting Standards Boards

Globalization of businesses has led the FASB and IASB to reevaluate the accounting standards that are used in businesses. With more companies growing and expanding internationally a new accounting system had to be adopted so that it can make the General Accounting Standards to be broader and widely acceptable. This will give the ability for foreign companies to join theSecurities Exchange Market and the ability for national companies to expand to other countries.

Because of so many changes going on globally like NAFTA, Mercosur and other trade agreements that influence our financial market enormously, FASB has found that it needs to work hand- in- hand with the IASB so that they can find a solution for these companies to report its financial status and that it can be understood. Currently there a need for Internantional Accounting Standards where approximately 113 countries will adopt.

The IASB and FASB engaged in this project in 2002 where they initiated a convergence project where they had the goals first to remove several differences between U.S. GAAP and the International Reporting Standards. The goal date for these changes was September 2004 , this would allow sufficient time for the European Union to establish the International Accounting Standards, they were acquiring a single monetary unit. The Norwalk agreement in September 2002 acknowledges that both boards are committed to the development of the project of high quality accounting standards that will be used for both national and international financial reporting. In that agreement they agreed to remove differences between U.S. GAAP and IFRS, continue to work on future projects and encourage other entities to participate and coordinate activities....