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Financial Reporting Standards and Principles

            The International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP) are rules and guidelines established to attempt to standardize accounting and recording practices across the United States and Internationally. While United States has traditionally used GAAP, the ever changing world market makes it necessary for the US to begin to use IFRS in conjunction with or sometimes in place of GAAP. In an effort to standardize fair value measurements for financial instruments, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) implemented a multistep approach to the standards. The International Financial Reporting Standards (IFRS) is working to provide standards on a practice that was once unregulated. The IASB and FASB believe if all companies reported financial instruments at fair value, the statements would be more easily understood and transparent. Disclosure of fair value information in financial notes is one way FASB and IASB are trying to move to fair value measurements. Also, allowing companies to record some financial instruments at fair value in financial statements; this is called a split model. This step is allowed but not required. Loans and receivables could be reported at amortized cost if specific criteria are met. Another important step is to develop a common measurement and reporting structure for the fair value reporting. The goal of developing the common measurement is to curb the misuse of financial instruments and reconcile the differences between the International and American Generally Accepted Accounting Principles (GAAP) fair value accounting. The IFRS is considered to be a principle-based accounting standard while American GAAP is regulatory in nature.
             Component depreciation, for tax purposes, is a method in which parts or sections of property are individually depreciated at different times or rates.


Essays Related to Financial Reporting Standards and Principles

1. The Financial Accounting Standards Board (FASB)

FASB's mission is, "to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors, and users of financial information.... Introduction To ensure that publicly corporations withhold the highest of standards, the Securities Exchange Commission (SEC) appointed the Financial Accounting Standards Board (FASB) as the organization responsible for establishing the standards for the financial reporting of non-government entities in the United States. ... Consider promptly any significant areas of deficiency...

  • Word Count: 2502
  • Approx Pages: 10
  • Grade Level: Undergraduate

2. Accounts

Modern accounting measures and communicates financial information about an economic entity. ... Financial managers use the financial statements to raise and spend cash and make intelligent financial decisions. ... • Accounting supplies information about the company to financial managers so they can make intelligent financial decisions. ... This income must be reported in their 2002 tax return even though they don't receive the money that year. ... Tax Years and Accounting Periods Income and expenses must be reported to the IRS for a specific period of time, called your t...

  • Word Count: 3170
  • Approx Pages: 13
  • Grade Level: Undergraduate

3. Form and Content of Financial Statements

Preparation of the statement of cash flows should be in accordance with the Statement of Financial Accounting Standards No. 17 "Statement of Cash Flows". ... FOOTNOTES TO FINANCIAL STATEMENTS The footnotes to financial statements should disclose the following: (a) principal accounting policies; (b) information required by the Statements of Financial Accounting Standards; and (c) additional information that is necessary for a fair presentation. ... ACCOUNTING POLICIES AND PRINCIPLES Accounting policies are the basic assumptions, principles, detailed standards, procedures and meth...

  • Word Count: 1055
  • Approx Pages: 4

4. FAS 123- Accounting For Stock Options

Two of these agencies are the Securities and Exchange Commission (SEC), set up by our federal government, and the privately created, Financial Accounting Standards Board (FASB). The standards the FASB creates are known as Generally Accepted Accounting Principles (GAAP). ... To better understand what Statement of Financial Accounting Standards (SFAS) No. 123 is and how it came about, the events that led up to the issuance of SFAS 123 will be identified. ... Therefore, lower net earnings would have to be reported on the income statement. Naturally, no business wants to report a lower net ear...

  • Word Count: 1930
  • Approx Pages: 8
  • Has Bibliography
  • Grade Level: High School

5. International Accounting Standards

The fundamental aim of the IASC has been, " to formulate and publish, in the public interest, accounting standards to be observed in the presentation of financial statements and to promote their worldwide acceptance and observance." ... Under the Securities Exchange Act of 1934, all publicly held companies are required to follow the SEC's guidelines for reporting financial accounting standards. ... The seen reason for this, is to allow the practice of accounting to remain in the private sector and its duty being served, to produce public financial statements and reports. "The FASB commu...

  • Word Count: 829
  • Approx Pages: 3
  • Has Bibliography
  • Grade Level: Undergraduate

6. Wells Fargo Annual Report

This paper seeks to analyze the 2001 Wells Fargo Annual Report. Ratios play an important role in analyzing the financial health of a company. ... All methods are in accordance with generally accepted accounting principles. ... This type of valuation is reasonable for this type of business, as it is the industry standard. ... Analysts agree, praising the overall financial health of this company. ...

  • Word Count: 1620
  • Approx Pages: 6

7. The Accounting Field Defined

Bookkeepers prepare numerical records for reports, research, financial statements, and payroll use. ... They may also direct the work of others performing similar duties, prepare various reports and documents such as payroll and sales tax reports, income tax returns, and personal property schedules, and examine and evaluate data relevant to the financial status of an organization. ... They also prepare invoices or monthly statements to be sent to customers, maintain financial files, complete claim, tax, or payroll forms, prepare and check financial reports used by management, and record detai...

  • Word Count: 1537
  • Approx Pages: 6
  • Grade Level: Undergraduate

8. international accounting

For instance in Germany there are no legislation on how to account for either leases or financial instruments but these standards exist for both issues in UK. ... The benefits of International accounting When differences persist within countries, then there is no comparable financial reporting. ... Although it requires a uniform system in order to avoid the preparation costs for financial reports. ... Atleast one of these company's clients has a foreign subsidiary so it will help to minimize the preparation, consolidation and auditing of these companies financial reporting once internati...

  • Word Count: 2830
  • Approx Pages: 11
  • Grade Level: Undergraduate

9. Assessment of Treatment Under US GAAP and IFRS

It is apparent that globalization has played a significant role in determining the financial reporting standards adopted by business organizations. ... In order to achieve the various objectives of GAAP, this framework is supported by assumptions, principles, and constraints. ... In ensuring these considerations are met, the consistency principle restricts businesses to employing consistent financial reporting principles from one period to another period (Shamrock, 2012). ... International Financial Reporting Standards The IFRS is a financial reporting standard that resulted from increased g...

  • Word Count: 3722
  • Approx Pages: 15
  • Has Bibliography
  • Grade Level: Undergraduate

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