scholarly journals The Convergence of U.S. GAAP with IFRS: A Comparative Analysis of Principles-based and Rules-based Accounting Standards

2016 ◽  
Vol 3 (5) ◽  
pp. 63
Author(s):  
Oris Guillaume ◽  
Denel Pierre
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Financial Accounting ◽  
Accounting Standard ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
Future State ◽  
The Impact ◽  
International Accounting Standard ◽  
Single Set

The Financial Accounting Standard Board (FASB) and the International Accounting Standard Board (IASB) have been working jointly toward the convergence of the U.S. generally accepted accounting principles (GAAP) and the international financial reporting standards (IFRS). However, several arguments still exist as to whether or not U.S. companies should adopt or converge with IFRS. This qualitative study identified the differences noted between rules-based and principles-based accounting, and discussed the impact of these accounting standards on financial reporting. Additionally, several resources were analyzed to understand the path to convergence and the future state of IFRS. The examination of information regarding the transition towards one single set of accounting standards led to the development of two alternate conclusions. Although research allows for the belief that convergence with IFRS is imminent, the fact remains that FASB and IASB will need to work diligently in order to resolve the differences between the two sets of accounting standards.

Did Codification Result in Improved Readability?

2017 ◽  
Vol 7 (1) ◽  
pp. 190
Author(s):  
Doug Barney ◽  
Daniel Tschopp ◽  
Steve Wells
Keyword(s):  
Financial Reporting ◽  
Essential Element ◽  
Accounting Standards ◽  
Securities And Exchange Commission ◽  
Financial Accounting ◽  
Reporting Standards ◽  
Financial Reports ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
The Impact

Financial reporting complexity costs money. The process of developing and promulgating financial reporting standards is costly. The Financial Accounting Standards Board (FASB), Securities and Exchange Commission (SEC), and the International Accounting Standards staff spend time, expertise, and funds writing detailed financial reporting standards. Reporting companies spend money studying and applying these financial reporting standards. Investors, financial analysts, and creditors, while knowledgeable in financial accounting, spend time and resources interpreting and analyzing the resulting financial reports. While there are a number of factors that contribute to the complexity in financial reporting, the level of reading complexity, or readability, is an essential element of a clear, easy-to-understand accounting standard. Recently the FASB adopted a process to bring about a Codification for U.S. Generally Accepted Accounting Principles (GAAP). What impact, if any, did the FASB’s Codification have on the level of reading complexity or readability in U.S. GAAP? The results of several readability tests reported in this article indicate the impact of Codification on the level of reading complexity or readability is not a positive one.

2. The international evolution of accounting

2014 ◽  
Author(s):  
Christopher Nobes
Keyword(s):  
Financial Reporting ◽  
Accounting Information ◽  
Accounting Standards ◽  
Financial Accounting ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
Financial Position ◽  
The Us ◽  
Company Directors ◽  
Double Entry

What are the purposes of accounting? How do these purposes affect how accounting works? What is double-entry bookkeeping? ‘The international evolution of accounting’ considers these questions and outlines some examples of how different countries have contributed to the development of accounting. Double-entry bookkeeping, conceived in thirteenth-century Italy, balances the debits and credits. It enables the calculation of profit and the presentation of a business's financial position. Publication of accounting information is required to protect shareholders and creditors from potential malpractice by company directors. The globalization of world business has resulted in International Financial Reporting Standards, now used by around 90 countries. The US use their Financial Accounting Standards Board's ‘generally accepted accounting principles’.

scholarly journals An analytical study on impact of international financial reporting standards on financial statements and ratios of Indian companies

YMER Digital ◽  
2022 ◽  
Vol 21 (01) ◽  
pp. 261-266
Author(s):  
Dr. Nabha Kamble ◽  
Keyword(s):  
Financial Reporting ◽  
Emerging Economies ◽  
Analytical Study ◽  
Financial Statements ◽  
Investment Climate ◽  
Accounting Standard ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
The World ◽  
International Accounting Standard

India is one of the emerging economies in the world. For economic development, foreign direct investment (FDI) is needed, to facilitate the investment climate. There is a need to integrate its financial reporting with rest of the economies of the globe so that investors from outside will appreciate the financial results and financial positions of the companies. This will provide uniformity and comparability of financial statements with the financial statements prepared in other countries. At present, Indian companies are preparing their financial statements as per Generally Accepted Accounting Principles in India (Indian GAAP). These Principles are based on IFRS issued by International Accounting Standard Board (IASB). However, these principles were modified substantially as per Indian laws and practices.

scholarly journals International Financial Reporting Standards: A Review of Status of Adoption and Approaches for Evaluation

2016 ◽  
Vol 69 ◽  
pp. 69-78 ◽  
Author(s):  
Habeeb Mohamed Nijam ◽  
Athambawa Jahfer
Keyword(s):  
Financial Reporting ◽  
Empirical Studies ◽  
Financial Statements ◽  
Technical Quality ◽  
Adoption Studies ◽  
Accounting Standard ◽  
Financial Reporting Standards ◽  
Ifrs Adoption ◽  
The Impact ◽  
International Accounting Standard

The purpose of this review is to explore various approaches and perspectives that are currently being used by empirical studies reporting the impact of IFRS adoption in different jurisdictions around the globe. For this purpose to be better served, this study also presents at the outset an overview of the scope, objectives and current adoption status of IFRS. This study reviewed the literature on classifications of IFRS adoption studies with the view of deducting methodical frameworks outlining the dimensions that may warrant investigation for IFRS to be consented as a set of quality and global accounting standards. This study concludes that the success of IFRS as an international accounting standard depends on one hand in its technical quality economically yielding to both uses and reporters of financial statements and on the other hand their acceptance across different jurisdictions despite their political, cultural and economic diversities.

scholarly journals Should The SEC Adopt International Financial Reporting Standards?

2011 ◽  
Vol 16 (1) ◽  
pp. 15-20
Author(s):  
Clemense Ehoff Jr. ◽  
Dov Fischer
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Financial Accounting ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
Financial Accounting Standards Board ◽  
Best Interest ◽  
Public Companies ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards

In 2002, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) formally began a process to converge Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). By the end of 2011, the SEC will likely decide on whether to adopt International Financial Reporting Standards as the financial reporting system for U.S. public companies, continue with the convergence project, or reject IFRS altogether. This paper examines the benefits and drawbacks of each option and formulates a recommendation as to which option is in the best interest of U.S. investors.

scholarly journals Continued Impact of International Financial Reporting Standards on U.S. Generally Accepted Accounting Principles

2020 ◽  
pp. 1-12
Author(s):  
Sylwia Gornik-Tomaszewski ◽  
Victoria Shoaf
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Fair Value ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
Accounting Principles ◽  
Value Measurement ◽  
The Impact

The milestone outcomes of over a decade of close cooperation between the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) on the convergence of U.S. Generally Accepted Accounting Principles (U.S. GAAP) and International Financial Reporting Standards (IFRS) have been highly publicized in the professional media. Great attention has been paid to such joint FASB and IASB projects as accounting for business combinations, fair value measurement, and revenue recognition. The impact of U.S. GAAP on IFRS has also been discussed and highlighted in many professional and academic resources. It should come as no surprise since FASB is considered a world leader in creating high-quality standards through an exemplary standard-setting process. In this paper, we look at the least noticed outcome of the convergence process: the impact of IFRS on U.S. GAAP. We reviewed all of the Accounting Standards Updates (ASUs) to the FASB Accounting Standards Codification®, from the first issued in June 2009 to 2016, and listed instances where U.S. GAAP was significantly modified to reflect international solutions. These examples of U.S. GAAP modifications indicate that the impact of IFRS on U.S. GAAP continued well after the bilateral cooperation between FASB and IASB effectively ended in 2014. Furthermore, look at the most recent FASB pronouncement let us conclude that the FASB continues to be engaged in seeking comparable global accounting solutions.

scholarly journals Convergence of IFRS and Ind AS – A Descriptive and Exploratory Insight

2021 ◽  
pp. 34-40
Author(s):  
Sayan Basu
Keyword(s):  
Advisory Committee ◽  
Financial Reporting ◽  
Accounting Standards ◽  
International Financial Reporting Standards ◽  
International Accounting ◽  
Reporting Standards ◽  
Accounting Standard ◽  
Financial Reporting Standards ◽  
International Accounting Standard ◽  
Financial Analyses

IFRS are designed to bring consistency to accounting language, practices and statements, and to help businesses and investors make educated financial analyses and decisions. The Ind AS are named and numbered in the same way as the corresponding International Financial Reporting Standards (IFRS). National Advisory Committee on Accounting Standards (NACAS) recommends these standards to the Ministry of Corporate Affairs (MCA). Indian viewpoints do not receive adequate attention at International Accounting Standard Board (IASB). Those are not debated adequately at the IASB before rejection. The present paper will discuss the reasons behind convergence of IFRs, rather than adoption. It also shows the Carve Outs of Ind AS from IFRS by providing valid reasons.

scholarly journals Why The SEC Is Delaying Adoption Of International Financial Reporting Standards

2013 ◽  
Vol 12 (2) ◽  
pp. 223 ◽  
Author(s):  
Clemense Ehoff Jr. ◽  
Dov Fischer
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Financial Accounting ◽  
International Financial Reporting Standards ◽  
International Accounting Standards ◽  
Reporting Standards ◽  
Financial Accounting Standards Board ◽  
Public Companies ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards

In 2002, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) formally began a process to converge Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). The SEC has repeatedly delayed its decision on whether to adopt International Financial Reporting Standards as the financial reporting system for U.S. public companies, continue with the convergence project, or reject IFRS altogether. This paper will examine several key reports issued by the SEC and the Financial Accounting Foundation to gain further insight into 1) why the SEC has repeatedly delayed its decision, and 2) what the SEC will ultimately decide.

scholarly journals Presentation Pattern and the Value Relevance of Comprehensive Income --- Evidence from China

2017 ◽  
Vol 9 (6) ◽  
pp. 31 ◽  
Author(s):  
Wenjing Xu ◽  
Ming Qi
Keyword(s):  
Financial Reporting ◽  
Information Disclosure ◽  
Value Relevance ◽  
Accounting Standards ◽  
Accounting Standard ◽  
Financial Reporting Standards ◽  
Comprehensive Income ◽  
Other Comprehensive Income ◽  
The Impact

In 2006 the Chinese Ministry of finance(CMF) issued new accounting standards that required companies began to present comprehensive income information in the statement of equity. In 2009 and 2014, CMF changed the comprehensive income presentation pattern consecutively twice, from the equity statement pattern to the performance statement transition pattern, and then to the single performance statement. The purpose of these changes is to harmonize China Accounting Standard (CAS) with International Financial Reporting Standards(IFRS). It also aims to enhance the usefulness of comprehensive income information by improving the transparency of information disclosure. From the perspective of presentation patterns, the paper examines the influence of presentation pattern changes on the value relevance of comprehensive income (CI), and on other comprehensive income (OCI). The results show that, under the equity statement pattern, neither CI nor OCI was correlated with value. Under the performance statement transition pattern, both CI and OCI have the value relevance. Under the single performance statement pattern, the CI has higher value relevance, while the OCI does not reflect higher value relevance. This study reveals the impact of comprehensive income presentation pattern on the usefulness of decision making. It has certain inspiration and reference for improving the quality of accounting standards and financial reporting.

scholarly journals Diverse accounting standards on disclosures of Islamic financial transactions

2019 ◽  
Vol 32 (3) ◽  
pp. 866-896 ◽  
Author(s):  
Habib Ahmed ◽  
Faruq Arif Tajul Ariffin ◽  
Yusuf Karbhari ◽  
Zurina Shafii
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Financial Accounting ◽  
Islamic Banks ◽  
Accounting Standard ◽  
Content Type ◽  
Financial Reporting Standards ◽  
Islamic Financial Institutions ◽  
Financial Transactions

Purpose Since International Financial Reporting Standards (IFRS) are not primarily meant for the accounting needs of Islamic banks, the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) was established to develop specific accounting standards for Shari’ah compliance. The purpose of this paper is to assess the de jure harmonisation between the disclosure requirements of the IFRS-based Malaysian Accounting Standards (MAS) and those of the AAOIFI. Design/methodology/approach Using Malaysia as a case study, the paper examines the extent of the de jure congruence between the IFRS-based MAS and AAOIFI’s Financial Accounting Standard No 1 (FAS1), which is considered to be one of the key disclosure standards for Islamic banks. We employ leximetrics and content analysis to analyse these accounting standards and the additional guidelines introduced by the Malaysian Accounting Standards Board (MASB) and the Central Bank of Malaysia (Bank Negara Malaysia, BNM) to identify the gaps between different tiers of MAS and FAS1. Findings The study finds that de jure congruence between the IFRS-based MAS and AAOIFI standards has improved through the introduction of additional accounting guidelines by both the MASB and the banking regulator, BNM. However, some gaps remain between the two standards. These gaps may be difficult to completely eliminate due to differences in the fundamental principles underlying the development of both standards. Originality/value While some studies have explored the de facto congruence between AAOIFI accounting standards and others, this paper is the first, to the best of the authors’ knowledge, to examine the de jure congruence between those standards with the IFRS-based MAS.

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