A Common Framework for Accounting Standards
Strategic Finance › Vol. 92 Nbr. 5, November 2010
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Summary
In September 2010, the US Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) completed the first phase of a project that will influence global standards setting for many years to come. Having a conceptual framework eliminates the need for a standards setter, such as the FASB or the IASB, to reestablish core concepts each time it develops or updates a standard. Additionally, by consistently referring to a stable conceptual framework, a standards setter is more likely to promulgate standards that are consistent with each other as well as with significant assumptions and constraints. The conceptual framework of US Generally Accepted Accounting Principles is documented in a series of Statements of Financial Accounting Concepts issued by the FASB. In July 2006, the FASB and the IASB issued a Preliminary Views document for Phase A that described the Boards' tentative thoughts on the overall objective of financial reporting and on the necessary and desirable qualitative characteristics of reported financial information.
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A Common Framework for Accounting Standards
In September 2010, the U.S. Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) completed the first phase of a project that will influence global standards setting for many years to come. Specifically, the Boards converged key portions of their conceptual frameworks. This month's column will explain what the Boards have done and the significance of their accomplishment.
What's a Conceptual Framework?A conceptual framework for a set of acco...See the full content of this document
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