The purpose of this report is to provide relevant background information on the history and status of international IFRS convergence. The history of international IFRS Convergence displayed the significant growth of convergence over time from the 1960’s till now. With many major players such as IASB, FASB AASB agreeing to work collaboratively with each other to improve and converge to international standards. The report ought to further highlight the current developments in the relationship between these major players in International Financial Reporting Standards. Many other major capital market standard settlers have since co-existed and cooperated with the stated goal of issuing converged ...view middle of the document...
Efforts to bring together the U.S. and the international accounting rules transpired emerging from post World War II’s obscurities. These initial efforts were based on harmonisation. Harmonisation focused on reducing differences between accounting standards used in major capital markets around the world.
Leading up to the 1970’s and 1980’s the International Standard-Setting Body takes root. With the establishment of the International Accounting Standard Committee (IASC) in 1973, a mission was made to formulate and publish, in the public interest, basic standards to be observed in the presentation of audited accounts and financial statements and to promote their worldwide acceptance. The generated high levels of worldwide interest due to the need for a common body of international standards to facilitate cross-border capital flow had the FASB wanting a more direct involvement in the drive to improve international standards.
A huge leap forward in regards to international activities takes place in the 1990’s. With a significant expansion of opportunity to collaborate with other standard settlers erupts with the FASB’s first strategy plan developed for international activities. Also involved in the issues of international accounting standards were U.S Congress and the US Securities and Exchange Commission (SEC). Towards the end of the decade, the FASB focused primarily in the working party to restructure the IASC into the IASB.
The pace of convergence accelerates in the 2000’s. The International Standards had been adopted by over a 100 countries, and the use of these standards continued to grow rapidly unto 2011. The FASB and the IASB agreed to work collaboratively with each other to improve and converge U.S GAAP and international standards.
The International Financial Reporting Standards (IFRS) foundation and International Accounting Standards Board (IASB) establishes the Accounting Standards Advisory Forum, with the aim to formalise, rationalise and streamline the relationships amongst both the National Standard Setters and other major bodies around the world, and furthermore participate with them on a combined basis on technical issues.
The ASAF had nominated the FASB as one of its twelve members, although SEC had not decided whether they would undertake IFRS for financial reporting for public companies in the United States. SEC designated the FASB as the organisation responsible for setting accounting standards for public companies in the U.S. The FASB’s involvement in the ASAF gave them an opportunity to represent U.S. interests in the IASB’s standard-setting process and to continue the process. The FASB involvement would also help continue...