The International Accounting Standards Board (IASB) follows a rigorous open due process. All meetings of the IASB and of the IFRS Interpretations Committee (formerly IFRIC) and its formal working groups are held in public and are usually webcast. Show The two key documents which govern the IASB's activities are the IFRS Foundation Constitution and the Due Process Handbook. Outlined below, in overview terms, are the due process steps followed in the IASB's standard-level projects, i.e. proposed new standards, and amendments to existing standards, and Interpretations developed by the IFRS Interpretations Committee (and ratified by the IASB). These steps are:
The IASB's research programme involves the analysis of possible financial reporting problems by collecting evidence on the nature and extent of the perceived shortcoming and assessing potential ways to improve financial reporting or to remedy a deficiency. Also includes the consideration of broader financial reporting issues, such as how financial reporting is evolving, to encourage international debate on financial reporting matters. National accounting standard-setting bodies and regional bodies associated with accounting standard-setting or regional financial reporting bodies, academics and other interested parties, participate in these activities (this includes through the Accounting Standards Advisory Forum, ASAF). A discussion paper, request for information or research paper may be released, which are designed to elicit comments from interested parties that can help the IASB decide whether to add a project to its standard-setting programme. Not all matters included in the research programme will proceed to a proposal for a new or modified standard or other pronouncement. Note: During 2012-2013, a number of changes were made to the IFRS Foundation Constitution and Due Process Handbook. The effect of these changes included moving the 'project agenda decision' to occur after, rather than before, the research process has occurred (although in some active agenda projects a discussion paper may also be issued, e.g. the projects on macro hedging and rate-regulated activities). These changes also clarified that 'maintenance' activities addressing matters narrow in scope do not need to follow all of the more formal project proposal steps.
Once the IASB has formally decided to add a project to its agenda, it proceeds to the development of an exposure draft. The exposure draft is issued for public consultation and the IASB may also undertake additional outreach activities such as meetings, discussion forums, webcasts and podcasts and roundtable meetings.
After the publication of an exposure draft, the IASB proceed to consider constituent feedback from the consultative process. In some cases, the IASB may decide to re-expose proposals before proceeding to a finalised pronouncement. Once deliberations have been finalised, the IASB's technical staff will prepare the final standard for balloting and voting on by the Board. The process may also include the issue of a 'review draft' of the final pronouncement prior to it being finalised. These documents are not part of formal due process but have the purpose of allowing a 'fatal flaw' review.
The IASB must conduct a post-implementation review of each new Standard or major amendment, usually after they have been applied for around two years. This means that the post-implementation review process will commence around 2.5-3 years after the effective date of the pronouncement, but may be deferred in some cases. The post-implementation review process can also be initiated in other circumstances such as regulatory changes or concerns raised by other parties. Which organization is responsible for promulgating US GAAP?The Financial Accounting Standards Board (FASB) is an independent nonprofit organization responsible for establishing accounting and financial reporting standards for companies and nonprofit organizations in the United States, following generally accepted accounting principles (GAAP).
What organization issues US accounting standards?The FASB develops and issues financial accounting standards through a transparent and inclusive process intended to promote financial reporting that provides useful information to investors and others who use financial reports. The Financial Accounting Foundation (FAF) supports and oversees the FASB.
Who has the statutory authority to set accounting standards in the United States?One of the powers Congress gave the SEC is the statutory authority to establish accounting standards for the private sector in the United States. Since the creation of the SEC, domestic companies have used GAAP to issue financial statements.
What does FASB stand for?The Financial Accounting Standards Board (FASB) is the private sector group responsible for writing accounting rules (Accounting Standards) that U.S. companies follow to issue financial reports. The rules that the FASB writes are referred to as Generally Accepted Accounting Principles (GAAP).
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