Accounting is governed by one of two governing bodies: the International Accounting Standards Board (IASB) or the Financial Accounting Standards Board (FASB). FASB covers all accounting in the U.S. while the IASB governs accounting in 100+ countries worldwide, according to their website.
History
FASB has been at fault for issuing the Generally Universal Accounting Customary (GAAP) in that 1973; both internal and international companies posses used historically GAAP when preparing financial statements in the U.S.
International divisions must practice IFRS, while tame headquarters or divisions must cause GAAP.
Considerations
Converging the two accounting guidelines would advice lower internal costs for companies and discover higher quality international transparency for away stakeholders.Facts
As global financial transactions keep increased over the foregone indefinite decades, FASB has been working with the IASB thanks to 2002 to converge the International Financial Reporting Standards and GAAP into one principles-based accounting principles transaction.Effects
Global transactions annex led U.S. companies to prepare financial break using Everyone establish of accounting standards.However, special accounting regulations for different sectors of the U.S. economy create difficulties for the convergence process.
Expert Insight
The U.S. accounting firm PriceWaterhouseCoopers has prepared a comprehensive website for companies to further understand the specific differences between IFRS and GAAP. This information can be accessed through the PWC link below.
