INTRODUCTION
FASB(Financial Accounting Standards Board) is an organization founded in 1973.FASBset its newly set financial principles for the progress of GAAP and IFRS composure. It produced a conceptual framework for accounting standards, that are the principles and rules for recording accounting transactions and preparing the financial statements. FASB adopted some of the financial statements of existing accounting concepts and has proposed its own framework for accounting standards to be introduced for harmony with GAAP.
Financial statements organized via any company, classically trail the outside standards that are the explicit guides for their preparation. These principles may vary universally. These variations across the nations may be significant in making evaluation of financial dataacross the countries.
FASB:
Financial Accounting Standards Board (FASB) was constituted by the US to improve GAAP (generally accepted accounting principles). FASB’s core mission was to improve and establish reporting methods and financial accounting or financial statements for the better understanding of the users of those statements.(FASB, 2018)
GAAP:
The GAAP (generally accepted accounting principles) is an assortment of commonly followed accounting standards, principles and rules of recording the financial transactions and preparing accounting / financial statements. It is basically a collection of accounting standards and recording rules.It was basically created to address the markets of the US and to considerablyhave an open view policy from the IFRSs.(Investopedia, 2018)
ANALYSIS of FASB & GAAP
OBJECTIVES
The new framework of FASB (financial accounting standards board) indicates some objectives of the financial statements; an adaptation of rules and principles of GAAP (generally accepted accounting principles) that includesidentifying the stakeholders of a company and their relationship or need of understanding towards the financial statements of the company. It specifies that financial statements are used to provide information regarding a company’s financial possession, performance and information regarding its assets and resources, and ownership to those resources. It may also communicate future uncertainties in regard to the company’s cash flows. FASB’s(financial accounting standards board) formed conceptual framework may be helpful in estimating the value of a firm. Overall, the framework seems as an adaptation of or in accordance with the GAAP (generally accepted accounting principles).(Tools, 2017)
The framework set by FASB (financial accounting standards board) sets some components of work. The FASB has set certain assumptions, characteristics, principles and constraints for its board. These elements more or less are comprised of what basic principles the GAAP (generally accepted accounting principles) has set.
ASSUMPTIONS
The financial accounting standards board has set some assumptions to its framework’s practicality. These assumptions are Separate entity, Going concern, Accounting period and Unit of measures. All of these four are elements of the principles of Generally Accepted Accounting Principles (GAAP). They intend to show similar or corresponding understandings. Both the frameworks analyze the business and the owners as separate entities as to the limited liability of owners. On-going concern is an assumption or part of both the frameworks that is to say the business is not going to be subject to closing or liquidation in the near future. Accounting period is a highlighted part of both the frameworks that is to say the financial statements.............
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