Accounting Standards
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Accounting Standards Boards Paper
December 10, 2012
Glenda Linton
ACC/541
Leslie Crews
This paper will tell how the accounting boards have spoken of their intention to accounting standards a major priority to converge projects to have better accounting practices. It will discuss the strategy and processes that both accounting boards want to use to keep their target date, which is 2011.
The Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) needs to converge both projects to have an improved convergence with GAAP and IFRS. The FASB and IASB can do joint statement that describes the strategy and processes they will use to keep the target date, but this can cause controversy in the accounting field. The two boards would improve the standards of current financial instruments and use the concepts to make it look as if they had just received it. The IASB and FASB have taken different paths to achieve the framework needed to join their ideas. They show considerable reluctance to see solutions from both sides, and are involved in leaving large companies confused when they are asked to used two different accounting standards when reporting the financials. Some of the conundrum is from differences in approaches for global convergence. FASB has issued only one encompassing statement this is highly comprehensive, and it follows a different timetable than the IASB goals. IASB wants guidance for change to be issued largely in numbers than planned phases, which is easier to follow and would give the United States companies more time to recognize international changes and reply to them. It would let IASB and FASB to modify and have hybrids of standards not effective as would be anticipated (Association for Financial Professionals, 2010).
The IASB and FASB are maintaining separate standards and guidance even because the goal is for them to come together and form an international group. The IASB and FASB have different views on fair value options for companies to reduce or cut back on their accounting inconsistency. A fair value basis would have certain entities to check and measure mismatches, but the fair value system will not be included in the FASBs guidance proposal. There are problems with the FASB governing rules covering the incurred loss impairment of credit loans. FASB would recognize if a loss has taken place only when the event triggers an accounting discrepancy, and this would allow the FASB to look at events and other information to see if the loss is indeed implicated. The IASB can have a model to follow to see if a certain amount of loss in credit transactions is expected and if they are recorded at amortized cost. The credit losses can be reassessed every period and the expectations recognized in net income immediately (Association for Financial Professionals, 2010).
FASB and IASB has modified the original strategy and agreed to a much needed re-deliberation that should be scheduled to find a solution for the convergence that would work with the Securities and Exchange Commission. This consideration for the IFRS should be incorporated into the United States reporting financial system, but it can redouble efforts to move past the major differences noted in the brief. This timeline has a vote of confidence from the SEC that published a guideline that would allow a 90-day period for comments. The SEC can start adjusting rules that would require the United States to start following the IFRS in 2014. If everything goes as planned, the United States would switch to accounting practices to generally accounting procedures to globalized financial reporting standards that can benefit all comparisons of financial statements, and allow help for international companies with costs and allow them to be compatible (Bureau of Labor Statistics, 2010).
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