Forum\"Many of the US based GAAP standards set by the Financial Accounting Stand

Question

Forum"Many of the US based GAAP standards set by the Financial Accounting Standards Board (FASB) are not compatible with the standards set by the International Accounting Standards Board (IASB), and vice versa. The incompatibility between the two organization’s standards has led to a push for reconciliation and convergence of standards to allow for increased compliance (Bonaci, Mustata, & Matis, 2012)"

Comment: You bring up a great point in the intended audience for both IASB and FASB. Hence why there underlying framework is different. Please Explain what framework is different between IASB and FASB

I also need any references you use.

Explanation / Answer

Following are the differnce in framework between IASB and FASB;

(a) The IASB framework has a broader purpose than the FASB framework. The purpose of assisting the IASB in developing or revising accounting standards is one, but not the only, purpose of the framework. The IASB framework also has other purposes, including assisting preparers, auditors, and users of financial statements. The FASB conceptual framework places less emphasis on other purposes.

(b) This difference in purpose also is reflected in the difference in status of the frameworks. The IASB framework resides at a higher level in its GAAP hierarchy than does the FASB framework in the U.S. GAAP hierarchy. For entities preparing financial statements under IFRS, management is expressly required to consider the IASB framework if there is no standard or interpretation that is specifically applicable or that deals with a similar and related issue. Under U.S. GAAP, the FASB Concepts Statements are ranked no higher than accounting textbooks, handbooks, and articles, and below widely recognized and prevalent general or industry practices.

You can also take references from official publication of IASB and FASB.

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