Changes in Financial Statement Presentation
The IASB and FASB have been working on a project together to minimize the differences in the way financial statements are presented to the public. Some of the major changes that we will notice in the statements are the adoption of the International standards. The information portrayed will be the same with some changes in the organization of the data. The changes are said to bring more understanding to the interpretability of financial statements as a whole. There are two organizations that are relied upon to ensure that the financial reporting both nationally and internationally is authentic, reliable, and understandable. Those two entities are the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB). The IASB is made up of 15 members who are brought in by trustees to set accounting standards for auditing, preparing and using financial reports, just to name a few. The FASB, which is in the private sector, is responsible for creating standards that monitor the financial statements that are being prepared by nongovernmental agencies. For the past eight years the IASB and the FASB have joined forces to create a new way of reporting financial information. The goal of this new presentation is to make the financial statements more uniform and easy to understand across the globe. Their efforts are being called “The Convergence Project.” Convergence will put standards in place that will minimize the differences between the U.S. Generally Accepted Accounting Principles (GAAP) and the International Financial Reporting Standards (IFRS) for the greater good. The statements are going to be separately classified based on the activities of operations. There will be five different classifications: Business, Financing, Income Taxes, Discontinued Operations, and Equity. The Business section of the proposed statements will be the first section reported on all three...
Please join StudyMode to read the full document