Fasb Convergence

Accounting Standards Paper The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) were both formed in 1973. The FASB is the organization, in the private sector, for establishing standards of financial accounting that governs the preparation of financial reports by non governmental entities. The IASB is an independent private sector body that develops and approves international financial reporting standards. These two have been working toward the same goal since they were formed. Today the IASB and the FASB are working on a joint venture referred to as the Convergence Project. IASB was formed in 1973 under the name International Accounting Standards Committee. Its mission was 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
They produced the Norwalk agreement. This set out the shared goal of developing compatible, high-quality accounting standards that could be used for both domestic and cross-border financial reporting. In 2001 the International Accounting Standards Committee changed to the International Accounting Standards Board. The mission stayed the same. In 2006 these two produced the Memorandum of Understanding. This elaborated on the Norwalk Agreement, setting forth guidelines in working toward convergence. The FASB (n.d.) website states the following are the guidelines set forth in the MoU:
Convergence of accounting standards can best be achieved by developing high-quality, common standards over time.
Instead of trying to eliminate difference between standards that are in need of significant imporovenent, the boards should develop a new common standard that improves the quality of financial