![]() ![]() Since then GAAP has increasingly addressed investors’ need to be able to evaluate and compare financial performance from one reporting period to the next and among companies. Before the 1930s corporate accounting and reporting focused on management and creditors as the end users. Over time, the FASB has evaluated and to some extent aligned their standards with International Financial Reporting Standards (IFRS) through a joint project or have decided to in other cases to not align them.Īccounting standards have evolved over time and for different users. The Securities and Exchange Commission (SEC) requires companies that file financial statements with them to follow GAAP or IFRS depending on whether they are U.S. Some 100 countries now require or allow the international standards that the IASB has developed. Ideally, a set of universal accounting principles would facilitate global capital flows and lower the cost of raising capital. About the same time, the European Union (EU) started work on Solvency II, a framework directive aimed at streamlining and strengthening solvency requirements across the EU in an effort to create a single market for insurance. In 2001 the International Accounting Standards Board (IASB), an independent international accounting organization based in London, began work on a set of global accounting standards called International Accounting Standards and International Financial Reporting Standards (collectively IFRS). In the United States, all corporate accounting and reporting is governed by a common set of standards, known as generally accepted accounting principles, or GAAP, established by the independent Financial Accounting Standards Board (FASB). Accounting is a system of recording, analyzing and reporting an organization’s financial status. ![]()
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