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Chapter 2: Q.2-31FRS (page 76)

Question: What are some of the differences in elements in the IASB and FASB conceptual frameworks?

Short Answer

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Answer

The IASB conceptual framework focus on the creation of financial statements as it looks up toaccomplish the requirements of all the shareholders. Whereas FASB targets financial reporting as its purpose is to provide aid to the investors.

Step by step solution

01

Meaning of Conceptual Framework

A conceptual framework is a linear representationthat assists in demonstrating the estimated relationship between cause and effect in a financial situation.

02

Differences in elements in the IASB and FASB conceptual frameworks

Differences between International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) include:

  • The International Accounting Standards Board (IASB) emerged on April 1, 2001. On the other hand, the Financial Accounting Standards Board (FASB) emerged in 1973.
  • The International Accounting Standards Board (IASB) is situated in London. While Financial Accounting Standards Board (FASB) is situated in the United States.
  • The International Accounting Standards Board (IASB) deals with the advancement of International Financial Reporting Standards and encourages the use of these standards. However, Financial Accounting Standards Board (FASB) is a non-profit entity that serves the advancement of Generally Accepted Accounting Principles (GAAP) in the general interest.
  • The International Accounting Standards Board (IASB) is also known as the beneficiary of the International Accounting Standards Committee. While the Financial Accounting Standards Board (FASB) was substituted by the Accounting Principles Board (APB) and the Committee on Accounting Procedure (CAP).

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Most popular questions from this chapter

(Revenue Recognition Principle) After the presentation of your report on the examination of the financial statements to the board of directors of Piper Publishing Company, one of the new directors expresses surprise that the income statement assumes that an equal proportion of the revenue is recognized with the publication of every issue of the company's magazine. She feels that the 鈥渃rucial event鈥� in the process of earning revenue in the magazine business is the cash sale of the subscription. She says that she does not understand why most of the revenue cannot be 鈥渞ecognized" in the period of the cash sale. Instructions

Discuss the propriety of timing the recognition of revenue in Piper Publishing Company's accounts with:

(a) The cash sale of the magazine subscription.

(b) The publication of the magazine every month.

(c) Over time, as the magazines are published and delivered to customers.

Expenses, losses, and distributions to owners are all decreases in net assets. What are the distinctions among them?

According to the FASB conceptual framework, the objective of financial reporting for business enterprises is based on the needs of the users of financial statements. Explain the level of sophistication that the Board assumes about the users of financial statements.

Revenues, gains, and investments by owners are all increasing in net assets. What are the distinctions among them?

What accounting assumption, principle, or constraint would Target Corporation use in each of the situations below?

(a) Target was involved in litigation over the last year. This litigation is disclosed in the financial statements.

(b) Target allocates the cost of its depreciable assets over the life it expects to receive revenue from these assets.

(c) Target records the purchase of a new Dell PC at its cash equivalent price.
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