Q.2-31FRS - Intermediate Accounting (Kieso)

Question

Question: What are some of the differences in elements in the IASB and FASB conceptual frameworks?

Step-by-Step Solution

Answer

Answer

The IASB conceptual framework focus on the creation of financial statements as it looks up to accomplish the requirements of all the shareholders. Whereas FASB targets financial reporting as its purpose is to provide aid to the investors.

Step 1: Meaning of Conceptual Framework

A conceptual framework is a linear representation that assists in demonstrating the estimated relationship between cause and effect in a financial situation.

Step 2: Differences in elements in the IASB and FASB conceptual frameworks

Differences between International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) include:

• The International Accounting Standards Board (IASB) emerged on April 1, 2001. On the other hand, the Financial Accounting Standards Board (FASB) emerged in 1973.
• The International Accounting Standards Board (IASB) is situated in London. While Financial Accounting Standards Board (FASB) is situated in the United States.
• The International Accounting Standards Board (IASB) deals with the advancement of International Financial Reporting Standards and encourages the use of these standards. However, Financial Accounting Standards Board (FASB) is a non-profit entity that serves the advancement of Generally Accepted Accounting Principles (GAAP) in the general interest.
• The International Accounting Standards Board (IASB) is also known as the beneficiary of the International Accounting Standards Committee. While the Financial Accounting Standards Board (FASB) was substituted by the Accounting Principles Board (APB) and the Committee on Accounting Procedure (CAP).