Intermediate Accounting

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Research Paper |

Intermediate Accounting II |

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Brandon Brown |

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The world as we know it is changing and along with it is an effort of increasing comparability between accounting procedures by having one set of accounting requirements. This goal to merge our accounting ways is called an international convergence in which over 100 countries are making an effort to follow a single set of accounting standards. Projects during the convergence will aim to reduce differences in between our accounting standards as well as improving them.

Currently in the United States our accounting system is called GAAP (Generally Accepted Accounting Principles) which is developed and handled by the FASB (Financial Accounting Standards Board). FASB is a non-profit organization that was started in 1973 to replace its’ predecessors the Accounting Principles Board (APB) and the Committee on Accounting Procedure (CAP) of the American Institute of Certified Public Accountant (AICPA). The reason FASB is important in setting the United States standards is because in making our financial information more concise, credible, and understandable, we have a much more efficient functioning economy since decisions on allocating resources relies heavily on the information given (Facts About FASB).

Although there is FASB in the United States, what takes place in majority of the rest of the world and who sets their accounting standards? The answer to that question is the IASB (Independent Accounting Standard-setting Body) which is based in London (IFRS FAQs). The IASB has 15 members from various countries that also include the United States (IFRS FAQs). It began its operations in 2001 and its predecessor was the International Accounting Standards Committee and is funded through contributions from industrial companies, major accounting firms, development banks and, “other international and professional organizations throughout the world” (IFRS FAQs). The IASB, similar to...