Answered: Describe the FASB–IASB convergence…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Describe the FASB–IASB convergence process and SEC recognition of IFRS.

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Step 1

IASB: International Accounting Standards Board is abbreviated as IASB. IASB is the organization which creates, develops, approves, and governs the set of accounting standards at global level for IFRS.

Financial Accounting Standards Board (FASB): FASB is an independent 7 member board, of accounting professionals overseeing the creation of financial statement. FASB standards are generally known as GAAP.

FASB-IASB Convergence Procedure:

The development of high quality common standards is the main way to achieve the accounting standards convergence.

The board of directors needs to replace the existing standards with the accounting standards in the convergence in such a way that it serves the requirements of the investors.

The SEC plays a vital role in the IASB and FASB to help them carry on with the convergence efforts.

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